Red Lobster likely closing more restaurants after – Business News
Red Lobster is contemplating closing more places because it continues to reevaluate its restaurant footprint within the wake of its 2024 chapter.
The seafood chain shuttered roughly 130 restaurants when it went by the chapter course of and Red Lobster CEO Damola Adamolekun instructed The Wall Street Journal in an interview that the company is continuous to review its places and leases because it considers methods to curb prices.
Adamolekun mentioned within the interview that visits have risen, with gross sales up about 10% from final 12 months, however they haven’t recovered to pre-bankruptcy ranges, and lots of of the chain’s places need upgrades.
“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,” he instructed the Journal.
Red Lobster filed for chapter in May 2024 after it racked up steep losses amid decreased gross sales and losses generated from an limitless shrimp deal that was initially priced at $20.
The company can also be coping with the fallout from a 2014 transfer that bought off possession of the chain’s real estate and saddled the company with lease funds.
Some of these leases contain a number of restaurants, which Adamolekun mentioned has made it tough to close some poorly performing places as a result of their lease is linked with greater performing ones.
Red Lobster CEO Damola Adamolekun instructed The Wall Street Journal that the restaurant chain will likely close more places within the wake of its 2024 chapter. ABC through Getty Images
The Journal reported that people aware of the company’s discussions mentioned Red Lobster would ideally have dozens fewer restaurants in its portfolio in order that it may give attention to higher-performing places.
Adamolekun was employed as CEO by the chain’s new possession in August 2024 after he led a restructuring effort at P.F. Chang’s.
The company has cut roughly 10% of its company employees in current months and the Journal’s report famous that Red Lobster is negotiating with seafood distributors as tariffs have pushed the prices of imported seafood greater.
During the chapter course of, roughly 130 restaurants closed because the company will decide methods to cut prices. Christopher Sadowski
Adamolekun instructed the Journal that when the company has handled struggling places, Red Lobster may look to develop in upstate New York and New England, the place it has a restricted presence.
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He’s additionally contemplating franchise offers for worldwide places in addition to promoting more Red Lobster-branded merchandise, like Cheddar Bay Biscuit mixes, by retail channels.
FOX Business reached out to Red Lobster for remark.
