Here's Why Red Lobster Just Closed Over 50 Locations

Fans of Red Lobster, the popular seafood chain with countless menu hacks, might be devastated to hear that their local restaurant could be closing soon. On May 13, 2024, liquidator company TAGeX Brands announced that it would be assisting in the sale of items in over 50 shuttered Red Lobster locations in America (part of 99 total restaurant location closures in 2024). Locations affected by this decision are located in Alabama, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Maryland, Michigan, Mississippi, New York, New Jersey, North Dakota, Oklahoma, South Carolina, Texas, Virginia, Washington, and Wisconsin. These closures may seem sudden and drastic but likely have to do with the company's recent financial woes.

In August 2020, seafood conglomerate Thai Union took full ownership of Red Lobster in an attempt to help the company remain profitable during the COVID-19 pandemic. Despite the various cost-cutting initiatives that became implemented during this time, the restaurant's losses continued, nearly $20,000,000 in just 2023. In April 2024, Red Lobster announced that it was considering filing for Chapter 11 bankruptcy in order to pay off its debts and find a new owner. Since the seafood chain has not found an investor since then, the recent closures by the chain are likely another effort to stay viable.

Red Lobster's recent history of financial problems

While Red Lobster thrived during the 20th century, its money problems seemingly began when Darden Restaurants, a large dining conglomerate who also owns Olive Garden, acquired the chain in 1995. As competing brands under Darden began to make more profits than the popular seafood joint, Red Lobster began to see less financial support from its parent company. 

In 2014, Darden sold the restaurant chain to Golden Gate Capital, who also eventually passed ownership to Thai Union in 2020. Throughout those years, Red Lobster acquired lots of lease debt, which it continues to battle to this day. It also hasn't helped that the company has cycled through various CEOs since the COVID-19 pandemic, and that it lost over $11,000,000 from its popular but financially risky endless shrimp deal in 2023.

As of April 14, 2024, at least 99 Red Lobster restaurants — or approximately 15% of its U.S. locations — suddenly shut down business. To find out if your area has been affected by the closures, visit the company's website and use the restaurant locator to see if your local joint remains in operation.