Red Lobster May Close More Restaurants Nationwide
Red Lobster may close additional restaurants as it continues rebuilding following its 2024 bankruptcy filing.
The seafood chain shut down about 130 locations during its restructuring process. However, leadership says more changes could follow as it reassesses its nationwide footprint.
Sales Are Improving, But Challenges Remain
CEO Damola Adamolekun recently told The Wall Street Journal that customer visits have increased. Sales are up roughly 10% compared to last year. Still, revenue has not returned to pre-bankruptcy levels.
He also acknowledged that many restaurants need upgrades.
“There’s a lot of positive signs, but we inherited a very damaged brand, so there’s still work to do to repair all of that,” Adamolekun said.
The Impact of Bankruptcy
Red Lobster filed for bankruptcy in May 2024 after suffering major financial losses. A $20 endless shrimp promotion drove traffic but hurt profits. At the same time, declining sales added more pressure.
Additionally, a 2014 decision to sell off company-owned real estate continues to weigh on operations. That move left the chain with long-term lease obligations.
Lease Agreements Complicate Closures
Some lease agreements cover multiple restaurant locations. As a result, closing one underperforming store is not always simple. Higher-performing restaurants may be tied to the same lease.
According to the Journal, company insiders say Red Lobster would ideally operate dozens fewer restaurants. This would allow the brand to focus on stronger markets.
Leadership and Cost Cutting
Adamolekun became CEO in August 2024 under new ownership. Before that, he led a turnaround effort at P.F. Chang’s.
Since taking over, he has reduced corporate staffing by about 10%. The company is also negotiating with seafood suppliers. Rising import costs and tariffs have increased expenses.
While Red Lobster has shown signs of recovery, executives say more work remains. For now, additional closures remain a possibility as the brand works to stabilize its future.