The beleaguered chain has faced substantial financial challenges in recent years, leading economists to again question its longevity.
This article is based on corporate postings and accredited media reports. All linked information within this article is fully-attributed to the following outlets: Wikipedia.org, ScrapeHero.com, RestaurantClicks.com, EatThis.com, RestaurantBusinessOnline.com, EatThis.com, Mashed.com, RedLobster.com, and FSRMagazine.com.
Wikipedia.org maintains a comprehensive page on the Red Lobster chain, which in part states: Red Lobster Hospitality LLC is an American casual casual dining restaurant chain headquartered in Orlando, Florida. The company has operations across most of the United States and Canada, as well as in China, Ecuador, Guam, Hong Kong, Japan, Malaysia, Mexico, Philippines, Puerto Rico, Turkey and the United Arab Emirates; as of June 23, 2020, the company had 719 locations worldwide.
The company’s first restaurant, according to Wikipedia, opened on January 18, 1968 in Lakeland, Florida.
According to ScrapeHero.com, as of May 11, 2022, there are 670 Red Lobster locations in the United States. As such, the company may appear to be thriving on the surface.
Recent news reports, however, elucidate business issues that continue to plague the company. In a February, 2022 article from RestaurantClicks.com, entitled “The Truth Behind Rumors of Red Lobster Closing,” writer Ryan F. states: For the moment, Red Lobster closings seem like they’re limited to individual restaurants, but the chain’s future is a little bit up in the air. While Red Lobster is on the search for a new CEO, it remains unclear what that new leadership and the ownership see as the future. In addition, the global supply chain is very much an issue, which continues to impact Red Lobster, its’ employees, and its offerings.
For additional perspective, in August, 2020 foodie website EatThis.com referenced hospitality trade site RestaurantBusinessOnline.com in their list of likely company bankruptcies of the near-future. See here for “5 Beloved Fast Food Chains That May Go Bankrupt Next,” by Mira Dominko.
As excerpted from Dominko’s article, which references Red Lobster’s pandemic-era difficulties:
Restaurant Business called out Red Lobster as "one name to watch" in a line of restaurants that may be going bankrupt next. The chain had its credit rating downgraded earlier this year, placing it in the "poor quality and high credit risk" category. Some of the reasons experts predict the chain will have a harder time coping during the pandemic is its dine-in culture and its niche offering of seafood only, which makes it a tougher pick for the remaining diners.
The company, however, has yet to declare the expected bankruptcy, but it appears to remain in a questionable financial state.
Let us explore further.
Red Lobster Status, 2022
According to a January, 2022 Mashed.com article update by Andrew Sheldon, titled “Seafood Chains That Are Disappearing Across the Country,” the company’s long-term outlook remains in question per CEO Kim Lopdrup.
From the article, referencing a brief period following credit agency Moody’s downgraded Red Lobster credit worthiness: Low and behold, just a few months later CEO Kim Lopdrup admitted that the company was in the midst of "the most challenging time Red Lobster has faced in our 52 years of operation." At the same time, Joerg Ayrle, CFO of parent company Thai Union, told the Orlando Sentinel that the possibility of shuttering restaurants was real. "Maybe we'll lose some locations if landlords are really not understanding enough. That's fine, too," he said.
In June, 2021, Lopdrup unexpectedly announced retirement plans in a press release that expressed an optimistic outlook. You can view that release here, as posted on RedLobster.com which includes this excerpt: Regarding his decision to retire, Lopdrup said, “The pandemic is finally winding down, and Red Lobster has emerged with the best menu we’ve ever had, vastly-improved off-premise systems, a stronger business model and over 10 million members in our award-winning loyalty program, My Red Lobster Rewards℠. We have great initiatives in the pipeline and a terrific leadership team in place. I’m confident we are well-positioned to attract an outstanding new CEO who can lead Red Lobster to greatness over the next generation.”
A followup RedLobster.com press release from July, 2021 named Kelli Valade as the company’s new CEO.
Earlier that year, FSRMagazine.com featured an article about Red Lobster’s completion of debt financing, which gives a detailed perspective of the company’s business.
If Red Lobster announces closures for this year, it will likely not be a surprise to economists and restaurateurs quoted in the above articles, though any such closings would appear to be strategic in nature.
For now, Red Lobster is remaining in business. From most indicators, though their financial challenges have not entirely vanished, the pandemic-related business struggles seem to have subsided to a degree.
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