According to reports, Red Lobster is closing at least 48 of its sites, and this week, a restaurant supply liquidator will put the affected restaurants’ kitchen equipment up for auction.
TAGeX Brands declared on Monday that an online auction will be held until Thursday, May 16, for a few Red Lobster locations that are closing across many states. Notably, Maryland and Colorado are losing four locations, while Florida and California are each losing five.
Three Red Lobster locations in Texas abruptly closed this week, with KETK of Nexstar reporting that they were “closed.” You couldn’t get in touch with any of those places by phone.
The mayor of Danville, Illinois, expressed his condolences to the impacted employees in a Facebook post following the unexpected closing of the city’s only Red Lobster.
“I was just notified by one of our local Red Lobster managers that after 31 years of serving our community, without notice, their parent company laid off the entire crew and closed the restaurant effective immediately,” Danville Mayor Rickey Williams Jr stated.
“This is despite the fact that they were rated number 15 out of over 600 stores for customer service & satisfaction last year,” he further continued.
There are a number of items up for grabs at the auction, including dining room furniture, upright refrigerators, and high-performance ovens. On its website, TAGeX Brands referred to it as “the largest restaurant equipment auction ever.”
It’s crucial to understand that the products aren’t offered for sale separately. One winning bidder will take all of the restaurant’s contents from each location.
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The seafood chain, which has been a mainstay of the American restaurant scene for decades, studied filing for bankruptcy, according to reports from Bloomberg and CNBC back in April. However, Red Lobster has not made this officially acknowledged.
According to those with knowledge of the situation, Red Lobster was seeking guidance on restructuring in order to deal with personnel costs and leases.
In the last few years, the company has had some internal and financial difficulties. A new CEO, chief marketing officer, chief financial officer, and chief information officer were among the executives the corporation hired between 2021 and 2022, according to CNN. It is said that they all left within two years.
And there was the never-ending shrimp debacle. The business charged $20 for their “Ultimate Endless Shrimp” on their regular menu in June 2023. This promotion is usually limited. The endeavor to draw in more customers to the store was successful, but at a price.
According to Restaurant Business, Red Lobster reported an operating loss of more than $11 million in the third quarter of that year. The parent business Thai Union Group claimed that the agreement involving the infinite shrimp was a “key factor” in the loss.
Citing the impact of a “combination of [the] Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs” on profitability, Thai Union Group stated earlier this year that it was considering to sell its ownership in the business.
