Versatile and resilient, lobsters survive by molting, shedding their skin and growing into new, larger shells. But eventually, energy will run out and change will become more difficult.
Red lobster, one of America's most famous shellfish ambassadors, has reached this stage in its life cycle. The once-ubiquitous restaurant chain filed for Chapter 11 bankruptcy protection on Sunday after more than half a century as the nation's leading seafood franchise.
The company said in a court filing that it has more than 100,000 creditors and owes between $1 billion and $10 billion. Red Lobster said it plans to downsize its stores in preparation for selling most of its assets. In the meantime, the surviving Red Lobster restaurants will remain open.
It was a painfully slow end for Red Lobster, whose final moments were telegraphed earlier this year when the company was reportedly looking to restructure its debt. After decades as a subsidiary of General Mills, Red Lobster was acquired by a private equity firm in 2014 and strengthened with an investment from a Thai seafood conglomerate in 2020. But the company has faced challenges in the years since the coronavirus pandemic began, with industry headwinds, rising costs and changing eating habits forcing the company to close underperforming stores.
Thai Union Group, a Thai seafood company, announced in January that it would abandon its investment in Red Lobster. Last week, dozens of Red Lobster locations began selling assets through liquidators, giving away the spoils of the crumbling restaurant dynasty, including industrial freezers, lobster tanks, and bar equipment (alcohol not included). .
In its heyday, Red Lobster achieved coveted status among suburban eateries. It was affordable, accessible, and luxurious enough to aspire to. Although the chain was founded in Orlando, Florida, it draws much of its inspiration from Bar Harbor, a rugged tourist destination on Maine's Atlantic coast.
Over its 56-year lifespan, Red Lobster has undergone numerous reinventions. Red Lobster was originally promoted as an oyster lounge and cocktail bar in the 1960s and '70s, but in later years it emerged as a family-friendly restaurant that was an introduction to seafood for many.
Perhaps the restaurant reached the pinnacle of cultural consciousness with the mention of Beyoncé, who name-dropped it in her 2016 song “Formation,” but just as quickly it fell from grace. Last year, the company stumbled on its all-you-can-eat shrimp deal, which was hugely popular with customers, causing it to lose $11 million in the quarter.
“This restructuring is the best path forward for Red Lobster,” CEO Jonathan Tibbs said in a statement Sunday. “This allows us to address some financial and operational challenges, emerge stronger and refocus on growth.”
Red Lobster did not respond to a request for comment.
