Red Lobster Abruptly Closes Dozens of Locations - 'Largest Restaurant Liquidation Ever' Underway
Red Lobster is closing multiple locations across America and equipment and furniture at the stores is being auctioned off.
The chain has not made an announcement, but restaurant liquidator TAGeX Brands said it was selling off kitchen equipment and supplies and furniture from more than 50 locations that are closing, according to Business Insider.
Meanwhile, Business Insider reported, local news organizations “from Orlando to Buffalo reported that locations had been listed as ‘temporarily closed'” on the Red Lobster website.
A syndicated report being carried across the country notes that “more than 80 Red Lobster locations in at least 27 states” have been affected.
“Select Red Lobster locations CLOSED today! Prepare for the LARGEST restaurant liquidation EVER! Fixtures, furniture, and equipment MUST GO. Auctions start NOW. SINGLE winner for each location. WINNER TAKES ALL,” TAGeX Brands posted on X.
BREAKING NEWS: Select Red Lobster locations CLOSED today! Prepare for the LARGEST restaurant liquidation EVER! Fixtures, furniture, and equipment MUST GO. Auctions start NOW. SINGLE winner for each location. WINNER TAKES ALL ❗️ Bid at https://t.co/VvjKXJqo6l pic.twitter.com/ceMSSpiHMh
— TAGeX Brands (@TAGexBrands) May 13, 2024
“TAGeX Brands is conducting the largest restaurant equipment auction event ever, auctioning off the contents of 50+ former Red Lobster locations across the country that were closed as part of Red Lobster’s footprint rationalization,” the company wrote in a statement.
Ramon Garcia, who worked at the Red Lobster in Hamburg, New York, said he learned he no longer had a job from the cook at the Buffalo-area restaurant, according to WKBW-TV.
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“I’m getting calls after calls this morning and my boy Don called me and he’s like, ‘You should come in right now.’ I’m like, ‘Why, I’m off today,’ and he’s like, ‘Man, you just need to come in because there’s a lot of stuff going on,'” Garcia said.
Garcia said Red Lobster’s corporate office said employees have three days to clean out the location.
“This happened out of nowhere. All the people that we work with, they’re losing their jobs and not knowing what to expect after that,” Garcia said. “It’s taking a toll on them.”
Last month, Bloomberg reported that the chain was considering filing for bankruptcy under Chapter 11, which allows a business to remain open while it reorganizes to deal with expenses such as debt that are putting a strain on profitability.
Red Lobster’s object would be to exit some long-term contracts and renegotiate some leases, Bloomberg reported, noting the chain has also been impacted by labor costs.
In January, Thai Union Group Plc – the chain’s major shareholder with 25 percent of its stock — said on its website it was ending its investment in Red Lobster.
“The combination of COVID-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders,” Thai Union Group CEO Thiraphong Chansiri said.
Red Lobster’s losses led to a $19 million share loss for Union Group, the statement said.
“Red Lobster is done and over with,” Chansiri said in February, according to the cooking-centric website Delish.
The website Restaurant Business said that an all-you-can-eat shrimp deal ate into the profits as well. Red Lobster offered Ultimate Endless Shrimp as a daily menu item beginning in June. The deal allows customers to choose two types of shrimp and eat all they want for $20.
Red Lobster posted an operating loss of more than $11 million in the third quarter with the deal cited as a contributing factor.
This article appeared originally on The Western Journal.
