Red Lobster, the casual dining chain best known for its endless shrimp promotions might soon be sleeping with the fishes. Due to heavy debts that the company has taken on over the years, along with some questionable business practices…
The future of the company is looking a little fishy.
The Decline Of Red Lobster
Currently, Red Lobster is trying to find a buyer to save the company from filing for Chapter 11 bankruptcy.
Over the past few years, the seafood chain fell into some trouble due to several lengthy and expensive leases that the company can’t get out of. These leases, paired with worsening demand have been damaging their bottom line.
But how did the company get here?
Red Lobster has endured a strange few years, fiscally speaking. Somehow, the company managed to narrowly avoid going into debt during the COVID-19 pandemic…
When many similar restaurants did not fare the same fate…
BUT IN 2021, LONGTIME CEO, KIM LOPDRUP RETIRED, BEGINNING A SERIES OF ROTATING CEOS.
Since then, the company has been through 3 new CEOs. The short tenure of each one meant very little time to fix the issues facing the company.
Beyond pandemics and CEO vacancies…
The company also has itself to blame for its lack of funds.
Last year, to boost traffic towards their restaurants…
Red Lobster extended its unlimited shrimp promotion from once per week to daily.
The result had the opposite effect, as diners flooded the restaurant in search of cheap meals…
THE COMPANY REPORTED A LOSS OF OVER $11 MILLION JUST FROM THE PROMOTION ALONE.
Will The Company Get A Lifesaver?
Red Lobster and other restaurants like it have been struggling even before the pandemic.
For the past 20 years, casual dining has been losing out to fast-casual restaurants like Panera Bread and Chipotle.
At the moment, the seafood chain had found a potential buyer…
But the deal fell through.
So far, we have no clue what plan Red Lobster has to fish itself out of bankruptcy…
And so far, they show no indication that they know what to do next either.
Be Great,
GCTV Staff
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