As the struggling seafood restaurant network prepares to go bankrupt, Red Lobster is turning the page on its worst times.
On Thursday, a U. S. determine approved the agency’s reform plan, clearing the way for the casual dining network to leave Chapter 11 bankruptcy protection.
Red Lobster, which is renowned for its deep shrimp menu and cheese biscuits, shut down dozens of locations and declared bankruptcy in May, resulting in a precipitous drop in revenue and restaurant visits. Like another chains, the firm had difficulty attracting customers during the COVID-19 epidemic as people pulled up on restaurant spending, and once more just amid great inflation, which pinched budgets.
Under the reform plan, a group of shareholders known as RL Investor Holdings may get the ring, the Florida-based organization said in a , media release. Red Lobster may continue to operate independently as a result of the acquisition’s completion, which is anticipated to occur before the end of September.
Red Lobster will also have new command. Damola Adamolekun, the former chief executive of the Eastern restaurant chain P. F. Chang’s, did lead Red Lobster as its new chief professional. He’ll take the reins from Jonathan Tibus, who served as Red Lobster’s CEO during the reform.
” This is a great day for Red Lobster”, Adamolekun said in a statement. We have a comprehensive and long-term investment strategy with our new supporters, including a commitment to invest in more than$ 60 million in new funding, which will help revive the recognizable brand while preserving its best history.
Red Lobster’s marketing budget has lost millions of dollars in the process. In the previous fiscal year, the business reported a net loss of$ 76 million. In a bankruptcy filing, the organization claimed that customer visitors had decreased by almost a fourth since 2019.
Due to the company’s misguided attempt to boost its base line by relaunching its all-you-can-eat crab present, the company’s descent into bankruptcy attracted more attention.
Customers who were eager to get a deal on the$ 20 deal accepted it as a challenge. Individuals took to , TikTok , to talk about how many crab they had set down in a sitting — one , person boasted , she’d consumed 108 over the course of a four-hour food.
The endless shrimp deal, according to Ludovic Garnier, the chief financial officer of a seafood conglomerate that has been Red Lobster’s largest shareholder since 2020, was cited as a major factor in the troubled chain.
Garnier said the promotion significantly increased customer traffic despite the fact that the number of people who took advantage of it far outstripped expectations. In response, the company adjusted the price to$ 22 and then$ 25.
Red Lobster currently operates in 544 restaurants in 44 U. S. states and four Canadian provinces.
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