Reportedly, Red Lobster is closing down at least 48 of its locations, prompting a restaurant supply liquidator to auction off kitchen equipment from the affected eateries this week.
TAGeX Brands announced on Monday that it will be conducting an online auction until Thursday, May 16, for selected Red Lobster restaurants closing across multiple states. Notably, California and Florida are each losing five locations, while Maryland and Colorado are losing four.
Additionally, Nexstar's KETK reported that three Red Lobster restaurants in Texas closed abruptly this week, with their hours listed as "closed." Attempts to contact these locations by phone were unsuccessful.
In Illinois, the mayor of Danville took to Facebook to address the sudden closure of the city's sole Red Lobster location, expressing his condolences to the affected workers.
"I was just informed by one of our local Red Lobster managers that, without prior notice, their parent company has laid off the entire crew and closed the restaurant with immediate effect after 31 years of serving our community," wrote Danville Mayor Rickey Williams Jr.
He continued, "This is despite the fact that they were ranked number 15 out of over 600 stores for customer service & satisfaction last year."
Regarding the auction, a variety of items are available, ranging from high-performance ovens to upright refrigerators and dining room furniture. TAGeX Brands has described it as "the largest restaurant equipment auction ever" on its website. It's essential to understand that the items are not being sold individually. Instead, each location will have one winning bidder who will acquire all contents from the restaurant. "These auctions are WINNER TAKES ALL – meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on," emphasized TAGeX Brands. In April, Bloomberg and CNBC reported that the seafood chain, a longtime fixture in the American restaurant landscape, had considered filing for bankruptcy, although Red Lobster has not officially confirmed this. The reports indicated that individuals familiar with the matter stated that Red Lobster was seeking restructuring advice to address leases and labor costs. The company has encountered financial and internal hurdles in recent years. Between 2021 and 2022, the company saw turnover in its executive ranks, including a new CEO, chief marketing officer, chief financial officer, and chief information officer, all of whom reportedly departed within two years, as per CNN. Then came the "endless shrimp" debacle. In June 2023, Red Lobster introduced its "Ultimate Endless Shrimp" — typically a limited-time offer — on its regular menu for $20. While the move succeeded in attracting more customers to the stores, it came with a hefty price tag. According to Restaurant Business, Red Lobster posted an operating loss of over $11 million in Q3 of that year. Parent company Thai Union Group attributed the endless shrimp deal as a "key factor" in the loss. Earlier this year, Thai Union Group announced its intention to sell its stake in the brand, citing the impact of a combination of factors such as the Covid-19 pandemic, sustained industry challenges, higher interest rates, and rising material and labor costs on profits. Founded by Bill Darden, the first Red Lobster opened its doors in 1968 in Lakeland, Florida, offering fresh seafood for people from all walks of life. As of Monday, the website states that there are over 700 Red Lobster locations worldwide.
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