Red Lobster Abruptly Closes 48 Restaurants Amid Financial Troubles

Red Lobster is closing at least 48 of its locations across the country, according to restaurant liquidator TAGeX Brands, as the seafood chain continues to struggle financially.

TAGeX Brands opened an online auction of the company's closing restaurant's kitchen equipment, furniture and other content on Monday which will continue through Thursday.

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"Select Red Lobster locations CLOSED today! Prepare for the LARGEST restaurant liquidation EVER! Fixtures, furniture, and equipment MUST GO," TAGeX Brands wrote on X, formerly known as Twitter. "Auctions start NOW. SINGLE winner for each location. WINNER TAKES ALL."

According to the liquidator, "each location will have one auction winner, who will receive all of the fixtures, furniture and equipment in that location."

Red Lobster has been struggling for years with declining sales and profit, reporting a loss of more than $11 million in the third quarter of 2023, according to Restaurant Business, after pushing its "Ultimate Endless Shrimp" as a fixed offer on its regular menu for $20.

The seafood chain's problems deepened when parent company Thai Union Group announced earlier this year that it would divest from Red Lobster after losing millions in their investment in it.

Last month, Bloomberg reported that a struggling Red Lobster was considering filing for Chapter 11 bankruptcy to address growing labor costs and potentially renegotiate its property leases and long-term contracts. A month before, Red Lobster had hired its fourth CEO in three years, restructuring expert Jonathan Tibus—a potential sign that a bankrupcty might be looming in the company's future.

Newsweek contacted Red Lobster for comment by email early on Tuesday.

Red Lobster has about 650 locations across the U.S., several of which now appear as "temporarily closed" on the company's website, confirming reports of the sudden closures. These include restaurants in Buffalo, New York; Danville, Illinois; Elkhart, Indiana; Gaithersburg, Maryland; Lewiston, Idaho; Jacksonville, Florida; Salina, Kansas; Tampa, Florida; Waterloo, Iowa; Watertown, New York; and Red Lobster's hometown of Orlando, Florida, according to WFTV 9.

Danville Mayor Rickey Williams Jr. commented on the closure of the locations in the Illinois city on Facebook, where he wrote: "I was just notified by one of our local Red Lobster managers that after 31 years of serving our community, without notice, their parent company laid off the entire crew and closed the restaurant effective immediately.

"This is despite the fact that they were rated number 15 out of over 600 stores for customer service & satisfaction last year. They also shuttered nearly 120 other stores without notice."

The mayor expressed solidarity to affected employees: "To our local Red Lobster family, THANK YOU for serving us so well & being the place we all went to for special occasions. Our prayers are with you and we're here to help in any way we can."

According to reports, the closures were sudden and unexpected for the chain's employees, as Williams said, with some showing up to work only to find out they no longer had a job. An alleged employee, @haileyreneeee, wrote on X on Monday, sharing another post about the Red Lobster's closures: "I lost my job today without warning and working Mother's Day yesterday."

MacroEdge, a company focused on economic intelligence, research and data, wrote that around 6,500 Red Lobster employees may have been impacted by the restaurants' closures. These numbers have not been confirmed, as Red Lobster has not yet commented on the closures.

Are you a Red Lobster employee affected by the recent closures of several of its locations across the U.S.? Contact g.carbonaro@newsweek.com.