Red Lobster could close up to 129 more restaurants amid bankruptcy filing
Red Lobster has identified an additional 129 restaurant locations across the United States it could shut down, if a bankruptcy court approves the company’s plan.
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June 7 (UPI) -- Red Lobster has identified an additional 129 restaurant locations across the United States it could shut down, if a bankruptcy court approves the company's plan.
In bankruptcy documents filed earlier this week, the Orlando-based casual dining chain said it has a total of 228 rejected leases it plans to close and sell.
The company said those locations will continue to lose money if they continue to operate as things currently stand.
Last month, the company disclosed on its website 99 locations across 28 states have already been shuttered, leaving an additional 129 locations in danger of suffering a similar fate.
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Several of the already-closed restaurants have already had their kitchen equipment stripped out and sold at auction as the company looks to pay off around $1 billion in debt compared to just $30 million in cash on hand, according to the bankruptcy filing in the Middle District of Florida.
The court filings last week listed the locations that could face closures including the 56-year-old chain's iconic location in New York City's Times Square, which it has occupied for 22 years.
Owners want $2.2 million in annual rent for the space, the New York Post reported.
"Recently, the debtors have faced a number of financial and operational challenges, including a difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry," Red Lobster CEO Jonathan Tibus said in court documents obtained by USA Today.
Tibus said the chain is also dealing with a 30% drop in guests since 2019.
Red Lobster first announced the closure of around 50 restaurants in early May while publicly considering the Chapter 11 bankruptcy proceedings.
Last year, the restaurant attempted to boost business by offering its "Ultimate Endless Shrimp" deal for $20. However, orders exceeded expectations, causing the seafood chain to lose $11 million in the third quarter of last year.
June 7 (UPI) -- Red Lobster has identified an additional 129 restaurant locations across the United States it could shut down, if a bankruptcy court approves the company's plan.
In bankruptcy documents filed earlier this week, the Orlando-based casual dining chain said it has a total of 228 rejected leases it plans to close and sell.
The company said those locations will continue to lose money if they continue to operate as things currently stand.
Last month, the company disclosed on its website 99 locations across 28 states have already been shuttered, leaving an additional 129 locations in danger of suffering a similar fate.
Related
Several of the already-closed restaurants have already had their kitchen equipment stripped out and sold at auction as the company looks to pay off around $1 billion in debt compared to just $30 million in cash on hand, according to the bankruptcy filing in the Middle District of Florida.
The court filings last week listed the locations that could face closures including the 56-year-old chain's iconic location in New York City's Times Square, which it has occupied for 22 years.
Owners want $2.2 million in annual rent for the space, the New York Post reported.
"Recently, the debtors have faced a number of financial and operational challenges, including a difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry," Red Lobster CEO Jonathan Tibus said in court documents obtained by USA Today.
Tibus said the chain is also dealing with a 30% drop in guests since 2019.
Red Lobster first announced the closure of around 50 restaurants in early May while publicly considering the Chapter 11 bankruptcy proceedings.
Last year, the restaurant attempted to boost business by offering its "Ultimate Endless Shrimp" deal for $20. However, orders exceeded expectations, causing the seafood chain to lose $11 million in the third quarter of last year.
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