A massive restaurant is now shutting down 50 locations as it seeks to liquidate, sources familiar with the matter have confirmed.
Red Lobster has not publicly commented on a potential Chapter 11 bankruptcy filing.
It has also not issued any public comment on shutting down restaurants.
However, people familiar with the matter told Bloomberg that the chain was considering filing for Chapter 11 bankruptcy.
And Neal Sherman, chief executive of TagEx Brands, a liquidation firm, posted about its work with the restaurant chain.
“TagEx Brands has 50+ auctions now LIVE from the Red Lobster closures — the largest restaurant liquidation ever — with furniture, fixtures, and equipment from each location.
Each auction will have a SINGLE winner for the listed items from the location they bid on,” he wrote.
“To all my restaurant and food service operator friends: This is an opportunity to outfit your ENTIRE operation or open something entirely new for a fraction of the price.”
Signs of an impending Chapter 11 bankruptcy filing first appeared in March when Red Lobster appointed as its CEO Jonathan Tibus, a managing partner at Alvarez & Marsal, a company known for corporate restructuring.
Red Lobster started with a single location in 1968.
“Before there was Red Lobster, there was Bill Darden, a man passionate about making delicious, high-quality seafood available and affordable to everyone, including people who lived far from the coast and regardless of race, gender, religion or economic means,” the company says on its website.
“What was once a single, family-owned restaurant in Lakeland, Florida, now has over 700 locations around the world.”
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Other Economy News Today
A whopping 3,000 retail stores will now close this year after popular clothing brands Rue21 and and Express announced their closures.
The list now grows to approximately 3,100 stores shutting down by the end of this year, per The-Sun.
And this number figure is expected to grow as more businesses announce closures throughout the remainder of the year.
Rue 21 recently announced bankruptcy and a plan to close all 540 remaining stores across the US in the next six weeks.
Express also announced plans on closing over 100 stores across the US in addition to a store closure in Central New York.
If the rising rate of retailers closing down stores continues, an estimated 8,000 locations will be closed by the end of the year.
That many closures would be 40% more than the US saw last year.
In 2023, over 4,000 retailers shut down stores, which was twice the amount of store closures from 2022, according to the National Retail Federation.
2023 also saw the closing of hundreds of Bed, Bath and Beyond stores after the major retailer filed for bankruptcy.
The retailer cited inflation as the primary reason for shutting down its in person stores, moving to an online only format.
The inflation rates from January 2023 to January 2024 increased by 3.1%, with food prices rising by 2.6%, as reported by the Bureau of Labor Statistics.
In response to the rising rate of inflation, many stores are raising prices or risk closing.
One Canadian supermarket, Loblaws, raised its food prices so dramatically that customers are staging a boycott for the whole month of May.
The Dollar Tree, a retailer known for everything in its stores being $1 or less, announced that it will be raising prices on certain items to as high as $7.
“This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7,” the company’s CEO, Rick Dreiling, said during an earnings call.
The last time the discount chain announced a price hike was in 2021 when prices on select items went from $1 to $1.25.
Aside from raising its prices, Dreiling also announced that over 1000 stores will most likely be closing in 2024.
Other major retailers such as Walgreens, Walmart, and JCPenney announced major closures this year.
Walmart announced store closures in California, Ohio, and Maryland–totaling to six closures so far this year.
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