At least 99 locations of Red Lobster are being auctioned off amid questions about the stalwart seafood chain’s long-term future.
In a post Monday on LinkedIn, Neal Sherman, founder and CEO of TAGeX Brands, a liquidation firm, announced he was leading the closure of more than 50 Red Lobster locations, with the restaurants’ equipment to be auctioned off.
A web page dedicated to the liquidations showed closure locations across the U.S. including in Denver; Indianapolis; Rochester, New York; Sacramento, California; San Antonio; and San Diego.
On Tuesday, Restaurant Business Magazine reported 99 locations were closing.
The closures represent about 15% of the company’s approximately 700 locations, though it remains the largest seafood restaurant chain in the U.S.
Red Lobster has struggled with a significant debt load, unfavorable lease terms, executive turnover and ill-advised strategies including an all-you-can-eat-shrimp promotion last fall that resulted in a significant loss for the company.
Last month, CNBC reported Red Lobster was seeking a buyer as it looked to avoid a bankruptcy filing, but none have materialized.
Earlier this year, Thai Union, the largest investor in Red Lobster, announced it was seeking to exit its position.
“The combination of Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders,� Thiraphong Chansiri, Thai Union Group’s CEO, said in a statement.
“After detailed analysis, we have determined that Red Lobster’s ongoing financial requirements no longer align with our capital allocation priorities and therefore are pursuing an exit of our minority investment.�
Red Lobster did not immediately respond to a request for comment.
