Red Lobster Evaluates Additional Restaurant Closures Following 2024 Bankruptcy Filing

Red Lobster is currently evaluating its restaurant footprint and considering the closure of additional locations following its bankruptcy filing in 2024. The seafood chain previously shut down approximately 130 restaurants during its bankruptcy process.

In a recent interview with The Wall Street Journal, Red Lobster CEO Damola Adamolekun stated that while customer visits have increased and sales have risen by about 10% compared to last year, they have not yet returned to pre-bankruptcy levels. Many locations still require significant upgrades.

Adamolekun remarked, “There’s a lot of positive signs, but we inherited a very damaged brand, so there’s still work to do to repair all of that,” highlighting the challenges the company faces in its recovery.

AMERICAN SEAFOOD CHAIN IS BETTING BIG ON NOSTALGIA AND BARGAINS TO WIN BACK DINERS

Red Lobster is weighing additional location closures as it continues to restructure its business. (Justin Sullivan/Getty Images)

In May 2024, Red Lobster filed for bankruptcy due to significant losses stemming from reduced sales and an unsuccessful endless shrimp promotion that was initially priced at $20. The company is also grappling with the repercussions of a 2014 decision to sell off ownership of its real estate, which left it burdened with high lease payments.

Some of these leases are tied to multiple restaurants, complicating the closure of underperforming locations, as Adamolekun explained. This interconnectedness makes it challenging to streamline operations effectively.

RED LOBSTER’S ENDLESS SHRIMP DEAL CREATED ‘A LOT OF CHAOS,’ NEW CEO DIVULGES ON BANKRUPTCY

Damola Adamolekun was named CEO of Red Lobster in August 2024. (Fortress Investment Group)

According to reports, Red Lobster aims to reduce its number of restaurants significantly to concentrate on higher-performing locations. Adamolekun, who was appointed CEO in August 2024 after a successful restructuring at P.F. Chang’s, has already cut about 10% of the corporate workforce.

Additionally, the company is currently negotiating with seafood vendors as tariffs have driven up the costs of imported seafood, further complicating its financial recovery.

EXPERTS SAY RED LOBSTER’S SHRIMP EXCUSE IS ‘SMOKE SCREEN’ FOR REAL PROBLEMS

A waitress carries a tray of a lobster kettle and a crab trio dish at a Red Lobster restaurant in Yonkers, New York. (Michael Nagle/Bloomberg via Getty Images)

Looking ahead, Adamolekun indicated that once the company addresses its struggling locations, Red Lobster may explore expansion opportunities in upstate New York and New England, where its presence is currently limited. He is also contemplating franchise agreements for international markets and increasing the availability of Red Lobster-branded products, such as Cheddar Bay Biscuit mixes, through retail channels.

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FOX Business reached out to Red Lobster for comment.

Red Lobster is currently evaluating its restaurant footprint and considering the closure of additional locations following its bankruptcy filing in 2024. The seafood chain previously shut down approximately 130 restaurants during its bankruptcy process.

In a recent interview with The Wall Street Journal, Red Lobster CEO Damola Adamolekun stated that while customer visits have increased and sales have risen by about 10% compared to last year, they have not yet returned to pre-bankruptcy levels. Many locations still require significant upgrades.

Adamolekun remarked, “There’s a lot of positive signs, but we inherited a very damaged brand, so there’s still work to do to repair all of that,” highlighting the challenges the company faces in its recovery.

AMERICAN SEAFOOD CHAIN IS BETTING BIG ON NOSTALGIA AND BARGAINS TO WIN BACK DINERS

Red Lobster is weighing additional location closures as it continues to restructure its business. (Justin Sullivan/Getty Images)

In May 2024, Red Lobster filed for bankruptcy due to significant losses stemming from reduced sales and an unsuccessful endless shrimp promotion that was initially priced at $20. The company is also grappling with the repercussions of a 2014 decision to sell off ownership of its real estate, which left it burdened with high lease payments.

Some of these leases are tied to multiple restaurants, complicating the closure of underperforming locations, as Adamolekun explained. This interconnectedness makes it challenging to streamline operations effectively.

RED LOBSTER’S ENDLESS SHRIMP DEAL CREATED ‘A LOT OF CHAOS,’ NEW CEO DIVULGES ON BANKRUPTCY

Damola Adamolekun was named CEO of Red Lobster in August 2024. (Fortress Investment Group)

According to reports, Red Lobster aims to reduce its number of restaurants significantly to concentrate on higher-performing locations. Adamolekun, who was appointed CEO in August 2024 after a successful restructuring at P.F. Chang’s, has already cut about 10% of the corporate workforce.

Additionally, the company is currently negotiating with seafood vendors as tariffs have driven up the costs of imported seafood, further complicating its financial recovery.

EXPERTS SAY RED LOBSTER’S SHRIMP EXCUSE IS ‘SMOKE SCREEN’ FOR REAL PROBLEMS

A waitress carries a tray of a lobster kettle and a crab trio dish at a Red Lobster restaurant in Yonkers, New York. (Michael Nagle/Bloomberg via Getty Images)

Looking ahead, Adamolekun indicated that once the company addresses its struggling locations, Red Lobster may explore expansion opportunities in upstate New York and New England, where its presence is currently limited. He is also contemplating franchise agreements for international markets and increasing the availability of Red Lobster-branded products, such as Cheddar Bay Biscuit mixes, through retail channels.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

FOX Business reached out to Red Lobster for comment.