Red Lobster Abruptly Closes Dozens of Locations

Last month, Red Lobster announced that it was contemplating a Chapter 11 bankruptcy filing due to its ongoing financial challenges, including a posted Q4 2023 loss of $12.5 million. This month, however, the company has taken drastic action.

CBS affiliate WNCT reports that the casual dining restaurant has abruptly closed more than 48 locations. Though Red Lobster has not officially announced or commented on the closures, even more locations across the nation were listed as “temporarily closed” on its website.

Ricky Williams Jr., the mayor of Danville, Illinois, posted an official statement after the city lost its only Red Lobster location.

“I was just notified by one of our local Red Lobster managers that after 31 years of serving our community, without notice, their parent company laid off the entire crew and closed the restaurant effective immediately,” he said. “This is despite the fact that they were rated number 15 out of over 600 stores for customer service & satisfaction last year.”

In addition to closing at least 48 locations, Red Lobster is using a liquidation service, TAGeX, to auction off all its supplies. Potential purchasers will be able to bid on everything from restaurant equipment — including high-performance ovens and subzero freezers — to dining room furniture. TAGeX announced the auction on Monday, stating that it would take place through Thursday, May 16.

But those hoping to snag a professional piece of equipment for a low price will be sorely disappointed to know that a bid can’t be placed on just one item. Rather, an auction bid can only be placed for all of the fixtures in a location, and the successful bidder must take everything in one location.

“These auctions are WINNER TAKES ALL — meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on,” read a statement on the auction’s website.

As previously reported, the seafood restaurant’s financial woes are due, in part, to the increasing cost of labor and land leases. The so-called “Endless Shrimp” fiasco also contributed to its Q4 2023 loss: Red Lobster at the time offered its usual all-you-can-eat platter for $20, which got more customers to come to the stores but cost the company significantly due to the rising cost of food. Since then, it has increased the cost of the deal to $25.