Red Lobster Abruptly Shut Dozens of Restaurants

By: Georgia | Published: May 14, 2024

Red Lobster is suddenly closing 48 locations nationwide due to financial struggles. According to restaurant liquidator TAGeX Brands, these closures are part of a massive liquidation event.

TAGeX Brands announced on X (formerly Twitter), “Select Red Lobster locations CLOSED today! Prepare for the LARGEST restaurant liquidation EVER! Fixtures, furniture, and equipment MUST GO.”

Online Auction Kicks Off

Starting Monday, TAGeX Brands opened an online auction for kitchen equipment, furniture, and other items from the closing Red Lobster restaurants. This auction will run through Thursday.

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A person's hands holding crab legs over a plate filled with shrimp and sauce at Red Lobster, with a glass of white wine in the background

Source: Red Lobster/Facebook

TAGeX Brands shared, “Auctions start NOW. SINGLE winner for each location. WINNER TAKES ALL.”

Red Lobster's Financial Woes

Red Lobster has been struggling for years, facing declining sales and profits. Restaurant Business reported a loss of over $11 million in the third quarter of 2023.

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Exterior view of a Red Lobster restaurant featuring a red and grey facade with a stone entryway and multiple flags, including the American flag, flying above

Source: Wikimedia Commons

The loss followed their decision to permanently offer the “Ultimate Endless Shrimp” for $20 on the regular menu, which didn’t pay off.

Parent Company Bails Out

Things got worse when Thai Union Group, Red Lobster’s parent company, decided to divest

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A plated Red Lobster meal showcasing lobster tail paired with steak, broccoli, and a potato, served on a blue-rimmed white plate with a glass of red wine

Source: Red Lobster/Facebook

The seafood chain’s problems deepened, as Thai Union announced they would pull out after losing millions.

Bankruptcy on the Horizon?

Bloomberg reported that Red Lobster is considering filing for Chapter 11 bankruptcy. 

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Front view of a Red Lobster restaurant with a prominent "Shrimp" and "Crab" signage on a modern exterior under a clear blue sky

Source: Wikimedia Commons

This move could help them renegotiate property leases and manage labor costs.

650 Locations in Limbo

Red Lobster operates about 650 locations across the U.S., but many now show as “temporarily closed” on their website. This includes places like Buffalo, New York; Elkhart, Indiana; and even their hometown, Orlando, Florida.

Entrance of a Red Lobster restaurant with red walls and glass doors, featuring promotional posters and the Red Lobster logo

Source: Wikimedia Commons

These sudden closures have left communities and employees in shock.

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Danville, Illinois Hit Hard

Danville Mayor Rickey Williams Jr. shared on Facebook about the local Red Lobster’s sudden closure after 31 years. 

Close-up of a Red Lobster dish featuring lobster tail, shrimp, and pasta fettuccine in a creamy sauce, served on a white plate with a cup of dipping sauce on the side

Source: Red Lobster/Facebook

He wrote, “Their parent company laid off the entire crew and closed the restaurant effective immediately. To our local Red Lobster family, THANK YOU for serving us so well & being the place we all went to for special occasions. Our prayers are with you and we’re here to help in any way we can.”

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Employees Blindsided

Employees were caught off guard by these closures. 

Daytime view of a Red Lobster restaurant exterior with a large signpost featuring the Red Lobster logo and a clear blue sky in the background

Source: Wikimedia Commons

An alleged employee, @haileyreneeee, posted on X, “I lost my job today without warning and working Mother’s Day yesterday.”

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6,500 Jobs Potentially Lost

Newsweek reports that economic intelligence company MacroEdge reported that around 6,500 Red Lobster employees might be impacted by these closures. 

External view of a Red Lobster restaurant with a modern design, featuring stone and metal elements and the Red Lobster logo prominently displayed

Source: Wikimedia Commons

However, these numbers haven’t been confirmed.

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Auction Frenzy

The auction of Red Lobster’s equipment and furniture has sparked significant interest. 

A meal of lobster, shrimp with broccoli

Source: Red Lobster/Facebook

TAGeX Brands’ Neal Sherman said, “Four sales were completed on Monday.”

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Community Outcry

Communities across the U.S. are reacting to the closures. 

Front entrance of a Red Lobster restaurant decorated with white benches and blooming trees, showcasing the logo and "Fresh Fish - Live Lobster" sign

Source: Wikimedia Commons

Many locals are disappointed and concerned about the sudden loss of their favorite seafood spots.

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The Future of Red Lobster

As Red Lobster navigates these closures and potential bankruptcy, its future remains uncertain. The outcomes of the auctions and bankruptcy decisions will be crucial.

A Red Lobster meal arranged on a blue-rimmed plate, including lobster tail, shrimp, broccoli, and steak, with a mobile phone displaying the Red Lobster rewards app beside it

Source: Red Lobster/Facebook

For now, fans and employees are left wondering what’s next for this iconic seafood chain.

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