Jump to content

Red Lobster

From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by 68.97.69.97 (talk) at 14:23, 21 September 2024 (Parent company: Golden Gate Capital 2014-2020). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

This article is about the United States restaurant chain. For other uses, see Red lobster (disambiguation).

Red Lobster Hospitality, LLC
Company typeSubsidiary
IndustryRestaurant
GenreCasual dining
FoundedJanuary 18, 1968; 56 years ago (1968-01-18)
Lakeland, Florida, US
FoundersBill Darden
Charley Woodsby
HeadquartersOrlando, Florida, US
Number of locations
649 (2024)
Area served
Key people
Jonathan Tibus (CEO)
Salli Setta (president)
Products
RevenueUS$2.6 billion (2018)[2]
OwnerGolden Gate Capital (2014–2020)
Number of employees
55,000[3]
ParentDarden Restaurants (1995–2014)

Golden Gate Capital (2014-2020)

Thai Union Group (2020–2024)
RL Investor Holdings (2024-present)
WebsiteRedLobster.com
Footnotes / references
[4][5]

Red Lobster Hospitality, LLC is an American casual dining restaurant chain headquartered in Orlando, Florida. The company has operations across most of the United States (including Puerto Rico and Guam) and Canada, as well as in China, Ecuador, Japan, Malaysia, Mexico, Philippines, Turkey and the United Arab Emirates; as of June 23, 2020, the company had 719 locations worldwide.[6][1] Golden Gate Capital was Red Lobster's parent company after it was acquired from Darden Restaurants on July 28, 2014.[7] Seafood supplier Thai Union acquired a 25 percent stake in the company in 2016 for a reported $575 million, and in 2020 purchased the remaining portion from GGC.[8]

In May 2024, Red Lobster closed 99 of its restaurants[9] and then filed for Chapter 11 bankruptcy protection after securing over $100 million in financing commitments from its lenders. The company has also entered a stalking horse agreement to sell itself and have its lenders manage it.[10]

History

Formation and growth

The first Red Lobster restaurant was opened on January 18, 1968, in Lakeland, Florida, by entrepreneurs Bill Darden and Charley Woodsby.[11][12] The oft-quoted date of March 27, 1968, is based on the incorporation date of Red Lobster Inns of America, Inc. (now GMRI, Inc.) in the Florida Secretary of State's Office.[13]

Originally billed as the "Harbor for Seafood Lovers", the first restaurant was followed by four others throughout the American South.[14] In 1970, General Mills acquired Red Lobster as a five-unit company and with new backing, the chain expanded rapidly in the 1980s.

A Lobsterfest duo meal

Red Lobster entered Canada in the 1980s, in many cases by buying Ponderosa restaurant locations. Currently, Red Lobster generally maintains between 25 and 30 locations in Canada, the bulk in larger urban centres in Ontario (across southern Ontario plus one in Sudbury, in northern Ontario) with a smaller number in larger urban centres in all three Prairie provinces. It exited the Quebec market in September 1997, due to financial losses, and was entirely absent from the Maritime provinces, British Columbia and the Arctic territories.[15]

In 1991, Red Lobster introduced its now famous garlic cheese biscuits (given the name Cheddar Bay Biscuits in 1996) developed by culinary leader Kurt Hankins.[16][17]

On March 29, 1994, Bill Darden died, after an extended illness, at the age of 75.[18]

In 1995, Red Lobster (along with Olive Garden and other sister chains), became part of Darden Restaurants, Inc. During that time, General Mills decided to release Darden into an independent, publicly traded corporation.[5]

2009 prototype and sale

The "Bar Harbor" prototype design as seen at the Baton Rouge, Louisiana location

In 2009, Red Lobster debuted its new Bar Harbor restaurant prototype modeled after coastal New England architecture.[19] The new exterior features include shingle and stone towers, signal flags, and Adirondack-style benches. The interior updates include dark wood paneling, warm-toned fabrics, soft lighting, and nautical decor and artwork.[20]

On December 19, 2013, Darden Restaurants announced plans to sell or spin off the Red Lobster brand, citing pressure from stock investors.[21] This was in direct response to Darden's going over budget on a new digital platform.[22]

On May 12, 2014, Darden announced that as part of its spinoff of Red Lobster, it was converting the co-located Red Lobster and Olive Garden locations into standalone Olive Garden locations.[23] On May 16, 2014, Darden announced it would be selling the Red Lobster seafood restaurant chain to Golden Gate Capital for US$2.1 billion.[24] Darden announced the completion of the sale of Red Lobster on July 28, 2014.[25] As part of the sale, a sale/leaseback of the real estate for 500 restaurants was completed to American Realty Capital Partners for $1.5 billion[26] to finance the purchase. By 2023, rents totaled $200 million per year and was a factor in the 2024 bankruptcy filing.[27]

On August 6, 2014, Red Lobster announced their new headquarters location in CNL Center City Commons in Orlando.[28] On March 6, 2015, Red Lobster officially opened the Restaurant Support Center.[29] Seafood supplier Thai Union acquired a 25 percent stake in the company in 2016 for a reported $575 million, and in 2020 purchased the remaining portion from GGC.[8]

Restructuring and bankruptcy

In March 2024, Jonathan Tibus was hired as the company's new CEO. Tibus previously was CEO during the bankruptcy of Kona Grill and the chief restructuring officer of Krystal. Officials deemed Red Lobster as a "zombie brand" and said that they were exploring options to save the company, including a restructuring turnaround, fire sale, or a possible bankruptcy filing. Red Lobster also announced that it was searching for a new buyer, and if one could not be found, the company may file for bankruptcy within the coming months.[30]

On April 16, 2024, Bloomberg reported that Red Lobster was preparing to file for Chapter 11 bankruptcy, highlighting leases and labor costs among the issues.[31] The company plans to exit some underperforming leases as well as address other long-term contracts and rising labor costs. The company expected to continue operating normally during the bankruptcy procedure while discussing a possible bankruptcy debt reduction plan with its creditors.[32]

On May 13, 2024, Red Lobster abruptly closed over 100 restaurants in 28 states.[9] This included all of its Buffalo-area locations and most of its Orlando-area locations. TAGeX Brands conducted liquidation auctions for restaurant fixtures and supplies at the closed locations and concluded them by May 16.[33]

On May 14, 2024, Red Lobster announced that it was preparing to file for Chapter 11 bankruptcy protection before Memorial Day weekend, planning to restructure agreements with its landlords and creditors in efforts to shed some of its debt.[34] On May 20, 2024, Red Lobster filed for Chapter 11 bankruptcy protection after securing over $100 million in financing commitments from its lenders. The company has also entered a stalking horse agreement to sell itself and have its lenders manage it, which will allow for the company to receive financing and shed some of its $1 billion debt.[10] On May 23, 2024, Red Lobster announced that their Canadian operations would also be declaring bankruptcy by no later than May 28. The company will close some underperforming Canadian locations during the proceedings.[35]

On June 6, 2024, Red Lobster announced that if their bankruptcy plan ends up getting approved, up to 129 additional locations would be permanently shut down. One of these locations included their restaurant at Times Square in Manhattan.[36] On June 12, hip hop rapper Flavor Flav was hired by the company to be the spokesperson of Red Lobster commercials, after he previously ordered the entire Red Lobster menu in order to save the company. In his first commercial, he would announce that CrabFest would be returning to restaurants nationwide.[37][38]

On June 14, it was reported that Fortress Investment Group, a Wall Street investment firm co-founded by the Milwaukee Bucks co-owner Wesley Edens, was interested in saving Red Lobster out of bankruptcy. The company evaluating which regions would fit Red Lobster's attempted comeback and revival.[39] That same day, Red Lobster Canada announced that it would ask the Ontario court to recognize its stalking horse bid and approve a sales process as soon as next week. This procedure would allow the company to preserve their operations in Canada, as the bid would allow for lenders avoid the risk of assets being sold for a lower price.[40] On June 18, an Ontario court approved the sale procedure for Red Lobster Canada.[41]

On August 25, 2024, Red Lobster announced the closure of 23 additional restaurants, all of which were set to be shuttered by August 31.[42] On August 26, Damola Adamolekun was appointed CEO of Red Lobster, replacing Tibus.[43]

On September 5, 2024, a court approved Red Lobster's bankruptcy plan. RL Investor Holdings, a private group of investors consisted of TCW Private Credit, Blue Torch and funds managed by Fortress Investment Group, acquired the company after court approval on September 16. Red Lobster officially exited Chapter 11 bankruptcy that day.[44][45]

Promotions

A basket of Cheddar Bay Biscuits from Red Lobster

Red Lobster has offered an endless snow crab leg promotion twice in its history (as of September 2003). However, in 2003, the promotion resulted in its parent company, Darden Restaurants, taking a $3 million charge to third-quarter earnings, resulting in president Edna Morris's departure from the company.

The ill-timed promotion was launched amid high wholesale crab leg prices. The chain also underestimated how many times a customer would order more. Further complicating matters at the restaurant level was the time customers spent table-side in the restaurant cracking crab legs. This resulted in increased waiting times in the lobby and overall diminished customer capacity per hour.[46]

Red Lobster introduced a new Daily Deals menu in 2020, featuring Endless Shrimp Mondays and more deals.[47]

In June 2023, Red Lobster reintroduced Ultimate Endless Shrimp, normally run as a limited-time promotion during autumn, as a permanent addition to their menu.[48] For $20, guests could order two shrimp dishes to start, and keep ordering until they were full.[49][50] This resulted in a $11 million loss for Red Lobster in its third quarter earnings for that year, as the company underestimated the amount of customers taking advantage of a deal that had low profit margins.[51][52] In response, Red Lobster raised the prices on the deal twice, from $20 to $22, and then to $25.[53]

The brand specializes in seafood, including crab, fish, lobster, mollusks, and shrimp. It also serves chicken, desserts, pasta, and steak.[54][promotional source?]

Lobster bisque controversy

In February 2016, Inside Edition reported that Red Lobster used a mix of less expensive langostino along with Maine lobster in their lobster bisque recipe.[55][56]

Locations

As of May 15, 2024, the company had 650 locations worldwide.[57] These locations span 44 US states (including Puerto Rico, Guam), China, Canada (25), Ecuador, Hong Kong (closed 2022), India, Japan, Malaysia, Mexico, the Philippines, Qatar, and the United Arab Emirates.[6][1] On May 14, 2024, it was announced that at least 48 locations in 21 states will shut down.[57]

  • The Red Lobster in Kitchener, Ontario (2013). This is one of the Ponderosa remakes, as are most Red Lobsters in Canada
    The Red Lobster in Kitchener, Ontario (2013). This is one of the Ponderosa remakes, as are most Red Lobsters in Canada
  • The Red Lobster in London, Ontario (2013). This one is also a Ponderosa remake, and also has an addition to the right, as it was added on when the Dundas location in London closed, around the late 80s.
    The Red Lobster in London, Ontario (2013). This one is also a Ponderosa remake, and also has an addition to the right, as it was added on when the Dundas location in London closed, around the late 80s.
  • Red Lobster on 7th Avenue, in Times Square, New York City (2007)
    Red Lobster on 7th Avenue, in Times Square, New York City (2007)
  • Red Lobster in Yonkers, New York (2012)
    Red Lobster in Yonkers, New York (2012)
  • Red Lobster opening in Hong Kong (2010).
    Red Lobster opening in Hong Kong (2010).
  • Red Lobster in Ann Arbor, Michigan (2010)
    Red Lobster in Ann Arbor, Michigan (2010)
  • Red Lobster in Gaithersburg, Maryland, in September 2013 (now closed).
    Red Lobster in Gaithersburg, Maryland, in September 2013 (now closed).
  • Red Lobster in Doha, Qatar, opened to the public in June 2012,[58] making it the company's second Red Lobster restaurant to be established in the Middle East.[59]
    Red Lobster in Doha, Qatar, opened to the public in June 2012,[58] making it the company's second Red Lobster restaurant to be established in the Middle East.[59]

In 2007, writer Stewart O'Nan published the novella Last Night at the Lobster about the closing of a Red Lobster restaurant in Connecticut.[60]

In February 2016, singer Beyoncé referenced Red Lobster in her single "Formation". After unexpectedly releasing the single and performing it during the Super Bowl 50 halftime show, Red Lobster reported a 33% sales increase due to the reference.[61]

See also

References

  1. ^ a b c "International Franchises | Red Lobster Seafood Restaurants". www.redlobster.com. Retrieved April 22, 2022.
  2. ^ "Red Lobster". Forbes.
  3. ^ "Red Lobster Competitors, Revenue and Employees - Owler Company Profile". Archived from the original on June 7, 2020.
  4. ^ "Darden 2011 Annual Report" (PDF). Darden Restaurants, Inc. Archived from the original (PDF) on December 24, 2012. Retrieved April 12, 2012.
  5. ^ a b Darden Restaurants, Inc. (May 29, 2011). "FY 2011 10-K". U.S. Securities and Exchange Commission. Retrieved April 11, 2012.
  6. ^ a b "Red Lobster Seafood Restaurants | US". www.redlobster.com. Retrieved June 23, 2020.
  7. ^ "Darden Completes Sale Of Red Lobster To Golden Gate Capital". MarketWatch. July 28, 2014. Archived from the original on August 27, 2014. Retrieved August 26, 2014.
  8. ^ a b Fuller, Austin (August 31, 2020). "Orlando-based Red Lobster acquired by Thai Union and other investors". Orlando Sentinel. Retrieved April 17, 2022.
  9. ^ a b McCarthy, Kelly (May 15, 2024). "Red Lobster closes multiple locations as company prepares to file for bankruptcy". ABC News.
  10. ^ a b "Red Lobster seeks bankruptcy protection with $100 mln in financing commitments". Reuters. May 20, 2024. Retrieved May 20, 2024.
  11. ^ Walansky, Aly (January 18, 2018). "Red Lobster turns 50: Celebrate with Cheddar Bay Biscuits and a year of free food". Today.
  12. ^ Myers, Dan (July 1, 2015). "9 Things You Didn't Know About Red Lobster". TheDailyMeal.com. Archived from the original on July 4, 2015.
  13. ^ Darden Restaurants, Inc. report to U.S. Securities and Exchange Commission (PDF). August 15, 1997. Retrieved April 16, 2018.
  14. ^ Meyersohn, Nathaniel (June 8, 2024). "The forgotten racial history of Red Lobster". CNN Business. Retrieved June 9, 2024.
  15. ^ Bégin, Jean-François (September 14, 1997). "Red Lobster ferme ses 14 restaurants du Québec" (PDF). BAnQ (in French). La Presse. p. A1-A2.
  16. ^ "The Sacramento Bee". Newspapers.com. April 24, 1991.
  17. ^ Hunt, Kristin (June 5, 2014). "A brief history of Red Lobster's Cheddar Bay Biscuit". Thrillist. Retrieved November 16, 2022.
  18. ^ Shenot, Christine (March 30, 1994). "Founder Of Red Lobster, William B. Darden, Dies". Orlando Sentinel. Archived from the original on August 24, 2014. Retrieved May 17, 2014.
  19. ^ "Bar Harbor - Overview". Red Lobster. Darden Concepts, Inc. Archived from the original on April 17, 2012. Retrieved April 11, 2012.
  20. ^ Trevizo, Perla (December 25, 2009). "Red Lobsters cook up fresher paven look". Times Free Press. Archived from the original on January 5, 2010. Retrieved April 11, 2012.
  21. ^ "Darden Looking to Spin off or Sell Red Lobster". Moneynews. The Associated Press. December 19, 2013. Archived from the original on December 24, 2013. Retrieved December 23, 2013.
  22. ^ Pedicini, Sandra (September 20, 2013). "Darden Restaurants reducing 85 corporate positions; COO Drew Madsen leaving". Orlando Sentinel. Archived from the original on December 31, 2013. Retrieved December 28, 2013.
  23. ^ Duprey, Rich (May 12, 2014). "Darden Restaurants Shedding Franken-Chain Concept". Motley Fool. Retrieved April 16, 2018.
  24. ^ Rupp, Lindsey (May 16, 2014). "Darden to Sell Red Lobster for $2.1 Billion". Bloomberg News. Retrieved July 29, 2014.
  25. ^ Choi, Candace (July 28, 2014). "Orlando's Darden completes completes $2.1 billion sale of Red Lobster". News 13. Bright House Networks. Retrieved May 14, 2024.
  26. ^ "American Realty Capital Properties Closes $1.5 Billion Red Lobster® Sale-Leaseback Transaction". www.prnewswire.com. July 28, 2014. Retrieved May 26, 2024.
  27. ^ Morgenson, Gretchen (May 24, 2024). "How private equity rolled Red Lobster". NBC News. Retrieved May 26, 2024.
  28. ^ Brinkmann, Paul (August 6, 2014). "Red Lobster announces location of new headquarters". Orlando Sentinel. Archived from the original on October 6, 2014. Retrieved September 26, 2014.
  29. ^ Arnold, Kyle (March 6, 2015). "Red Lobster debuts new downtown HQ". Orlando Sentinel. Retrieved February 11, 2016.
  30. ^ Blank, Christine (March 25, 2024). ""Zombie brand" Red Lobster flips CEO position to turnaround specialist". SeafoodSource. Retrieved March 31, 2024.
  31. ^ Basu, Reshmi (April 16, 2024). "Red Lobster Considers Bankruptcy to Deal With Leases and Labor Costs". Bloomberg.com. Retrieved April 17, 2024.
  32. ^ Revell, Eric (April 16, 2024). "Red Lobster considering bankruptcy filing: report". Fox Business. Retrieved April 16, 2024.
  33. ^ Meyersohn, Nathaniel (May 13, 2024). "Red Lobster is abruptly closing dozens of restaurants". CNN. Retrieved May 13, 2024.
  34. ^ Haddon, Heather (May 14, 2024). "Red Lobster Preparing to File for Bankruptcy Protection This Month". The Wall Street Journal. Retrieved May 14, 2024.
  35. ^ "Seafood chain Red Lobster will ask Canadian court to enforce U.S. bankruptcy in Canada". Yahoo! Finance. May 23, 2024. Retrieved May 23, 2024.
  36. ^ Valinsky, Jordan (June 6, 2024). "Red Lobster closings: These are the locations it wants to shut down". CNN. Retrieved June 15, 2024.
  37. ^ Encinas, Amaris (June 12, 2024). "Flavor Flav makes good on promise to save Red Lobster, announces Crabfest is back". USA Today. Retrieved June 15, 2024.
  38. ^ Morrow, Brendan (June 5, 2024). "Flavor Flav orders entire Red Lobster menu to save 'one of America's greatest dining dynasties'". USA Today. Retrieved June 15, 2024.
  39. ^ Zilber, Ariel (June 14, 2024). "Firm co-founded by Milwaukee Bucks' billionaire co-owner wants to save Red Lobster from bankruptcy". New York Post. Retrieved June 15, 2024.
  40. ^ "Red Lobster Canada to ask Ontario court to OK sales process". Global News. June 14, 2024. Retrieved June 15, 2024.
  41. ^ "Ontario court approves sales process for Red Lobster Canada". CBC. June 18, 2024. Retrieved September 5, 2024.
  42. ^ Guszkowski, Joe (August 25, 2024). "Red Lobster to close more struggling restaurants this week". Restaurant Business Online. Retrieved September 5, 2024.
  43. ^ Randles, Jonathan (August 26, 2024). "Red Lobster Lenders Tap Ex-P.F. Chang's Head Adamolekun as CEO". Bloomberg.com. Retrieved August 26, 2024.
  44. ^ Lucas, Amelia (September 5, 2024). "Red Lobster cleared to exit Chapter 11 bankruptcy protection". CNBC. Retrieved September 5, 2024.
  45. ^ Chapman, Michelle (September 16, 2024). "Red Lobster exits Chapter 11 bankruptcy protection". Yahoo! Finance. Retrieved September 16, 2024.
  46. ^ Newton, Benita D. (September 26, 2003). "All-you-"can-eat was too much". St. Petersburg Times Online. Archived from the original on April 28, 2012. Retrieved April 11, 2012.
  47. ^ "New Daily Deals at Red Lobster® Give Everyone Something to Celebrate in 2020". Red Lobster. September 28, 2020. Archived from the original on January 27, 2021. Retrieved February 28, 2021.
  48. ^ Spina, Matthew (June 26, 2023). "Red Lobster Adds Ultimate Endless Shrimp To Its Permanent Menu". Tasting Table. Retrieved May 24, 2024.
  49. ^ Fuller, Austin (June 26, 2023). "Red Lobster will start serving 'endless shrimp' every day". Orlando Sentinel. Retrieved May 24, 2024.
  50. ^ Kiner, Deb (June 26, 2023). "Red Lobster makes Ultimate Endless Shrimp available all day, every day". PennLive.com. Retrieved May 24, 2024.
  51. ^ Meyersohn, Nathaniel (May 3, 2024). "What went wrong at Red Lobster". CNN. Retrieved May 14, 2024.
  52. ^ Guszkowski, Joe (November 9, 2023). "Red Lobster goes overboard with endless shrimp deal". Restaurant Business. Retrieved May 24, 2024.
  53. ^ Jay, Marley (November 30, 2023). "Red Lobster says unlimited shrimp promotion was too popular and too cheap". NBC News. Retrieved May 24, 2024.
  54. ^ "Menu". Red Lobster.
  55. ^ Bellomo, Rheanna O'Neil (February 10, 2016). "What You Need To Know Before You Eat Lobster This Valentine's Day". Delish. Retrieved July 23, 2016.
  56. ^ "A Third of Tested Restaurant Lobster Dishes Actually Contain Cheaper Seafood, Investigation Shows". Inside Edition. February 8, 2016. Archived from the original on January 26, 2022. Retrieved January 26, 2022.
  57. ^ a b Chung, Maya (May 14, 2024). "At Least 48 Red Lobster Locations Are Closing. People Aren't Happy About It". Time. Retrieved May 15, 2024.
  58. ^ "Red Lobster Opens in Doha". Marhaba.qa. June 11, 2012. Archived from the original on January 27, 2019. Retrieved January 26, 2019.
  59. ^ "About Us". Red Lobster Middle East. Retrieved January 26, 2019.
  60. ^ Gildea, Kevin (January 6, 2018). "Last Night at the Lobster by Stewart O'Nan". The Irish Times. Retrieved May 26, 2024.
  61. ^ "Red Lobster: Sales surged after Beyonce's "Formation"". CBS News. February 9, 2016. Retrieved May 26, 2024.

Further reading

Retrieved from "https://en.wikipedia.org/w/index.php?title=Red_Lobster&oldid=1246861094"