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It may be the end of an era for popular seafood chain Red Lobster, which officially declared bankruptcy on Monday after months of speculation and the sudden closing of dozens of restaurants.
Now the company is speaking out to its loyal customers and investigating the role its shrimp supplier played in its demise.
Related article: Red Lobster suddenly closes dozens of stores without warning employees, begins auctioning equipment
In a letter posted on social media, Red Lobster thanked customers for their nearly 50 years of loyalty and assured the public that the chain is not going anywhere.
We are here to celebrate every moment, big or small, with our valued guests. pic.twitter.com/JmAoNGP4a8
— Red Lobster (@redlobster) May 21, 2024
“The term bankruptcy is often misunderstood. Filing for bankruptcy does not mean we are going out of business,” Red Lobster wrote. “In fact, it is the opposite. It is a legal process that will allow us to make changes to our operation and cost structure that will position Red Lobster to emerge stronger going forward.”
Red Lobster noted that companies like Delta Air Lines and Hertz “came out stronger” after filing for Chapter 11 (Delta Air Lines September 2005Hertwin May 2020) and found a way to recover.
“Birthdays, graduations, anniversaries, and of course weddings. We’ve been there for all of these moments,” the chain wrote. “Red Lobster is determined to be a part of these moments for generations to come.”
Red Lobster’s decline was a slow burn, largely due to an $11 million loss in November 2023 from the chain’s “Endless Shrimp” promotion. The deal offered customers all-you-can-eat shrimp for $20, but it turned out to be a little too popular.
Last week, stores across the country reportedly began closing without warning, with dozens of stores auctioning off all of their furniture and fixtures online, with some employees claiming they were given no advance notice.
In a filing Sunday, Red Lobster CEO Jonathan Tibbs said: I called my ex CEO Paul Kenney and Red Lobster’s seafood supplier and owner, Ty Union, discuss decisions surrounding the “Endless Shrimp” promotion and Red Lobster’s decision to make the promotion permanent rather than limited-time. “We are currently investigating the situation,” he said.
Related article: Red Lobster loses $11 million because endless shrimp trade is so popular
“We understand that the Thai Union has exercised significant influence over our shrimp purchases,” Tibbs wrote. ”[Red Lobster is] Investigating the impact of the controls exercised by Thai Union in conjunction with Mr. Kenny and other associated entities and individuals of Thai Union, and determining that the measures taken are appropriate having regard to the various interests of these parties; Investigate whether it was consistent with applicable obligations and responsibilities to Red Lobster. ”
thailand union Has completed Acquired Red Lobster in 2020.