The 56-year-old company announced filing for Chapter 11 bankruptcy last month after a series of financial hurdles, from rising labor costs to all-you-can-eat promotions that backfired.
(NEXSTAR) — More than 100 additional Red Lobster locations across the U.S. may shut down if the company can't renegotiate their leases, according to multiple reports.
The financially-strapped seafood chain said in a new court filing that 228 rejected leases could continue to lose cash under current operations, Restaurant Business reported. Many of those restaurants abruptly closed in May, per CNN, which published a list of looming closures.
Now, approximately 135 more locations are at risk of shuttering — including nearly two dozen in Florida, the most out of any other state on the list.
Red Lobster's flagship location in Times Square is reportedly on the chopping block as well. The restaurant's lease expires at the end of June, and it would cost the company roughly $2.2 million per year in rent to stay open, according to the New York Post. The outlet previously reported that Red Lobster was fighting to negotiate new terms with the property's landlords.
Red Lobster has not responded to Nexstar's request for comment on the new potential closures.
The 56-year-old company announced filing for Chapter 11 bankruptcy last month after a series of financial hurdles, from rising labor costs to all-you-can-eat promotions that backfired.
“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth," Red Lobster CEO Jonathan Tibus said in a May 19 press release announcing the filing.
Aaron Allen, the founder of restaurant consulting firm Aaron Allen & Associates, told the Associated Press last month that Red Lobster would sometimes lower its prices to compete with faster and cheaper chains like Chipotle and Panera — but the move proved to be disastrous.
In 2003, the company lost millions of dollars on its “Endless Crab” deal when crab prices rose, Allen said. Twenty years later, the chain did the same thing with its “Ultimate Endless Shrimp” feast, placing the typically limited-time offer on its regular menu for just $20. The shrimp fiasco reportedly contributed to millions in losses in Q3 of 2023.
Maintaining stable management has also proven difficult, with the company seeing multiple ownership changes throughout its history. Earlier this year, Red Lobster co-owner Thai Union Group, one of the world’s largest seafood suppliers, announced its intention to exit its minority investment in the chain.
Red Lobster's roots date back to 1968, when the first restaurant opened in Lakeland, Florida. It currently has more than 700 locations worldwide.
The Associated Press contributed to this story.
