re: Red Lobster lists 99 restaurants closures in 28 states

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Red Lobster has had a really rough last 10 years, maybe even worse than the rest of us; since 2021, the chain has had five different CEOs. In 2014, its parent company Darden sold Red Lobster to a private equity firm called Golden Gate Capital for $2.1 billion. That sale helped Darden pay off $100 million in debt and fueled significant growth for its other restaurants, like Olive Garden, in the ensuing years. Even when COVID hit in 2020, the company still managed to maintain positive cash flow as other restaurants floundered. Red Lobster, though, continued to struggle.

But again, it wasn’t because of the shrimp. Following the sale of Red Lobster to Golden Gate, the chain’s real estate assets were also sold off, which meant that the restaurants now had to pay rent on these locations to their parent company. As such, the company was stuck in leases for underperforming restaurants that it couldn’t afford. As with other private equity forays into industries like retail and media, Red Lobster’s new private equity owner saddled it with tons of debt.

In August of 2020, Golden Gate Capital sold Red Lobster to Thai Union, a Thailand-based seafood company that owns a number of seafood brands, including canned tuna brand Chicken of the Sea. Once Thai Union took over, Red Lobster insiders say that the company engaged in extreme cost-cutting measures and did not place enough emphasis on innovation, especially as fast-casual restaurants like Cava and Chipotle took over an increasingly large portion of the casual dining market. Just four years later, in January 2024, Thai Union was ready to get out of the restaurant business, citing “sustained industry headwinds, higher interest rates and rising material and labor costs.”

And so after billions of dollars in losses, too many executive shuffles to count, and three different corporate ownership groups in the past decade, why are we still trying to insist that Red Lobster’s failure is the shrimp’s fault? It’s obviously much funnier, and easier, to believe that something as silly as an endless shrimp promotion could really spell the end of a restaurant that’s been around since 1968.

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The following year, Darden sold Red Lobster to Golden Gate Capital, a private equity firm, for $2.1 billion. To help fund the deal, Red Lobster spun off its real estate assets in a transaction known as a sale leaseback agreement. Red Lobster had long owned its own real estate but would now be paying rent to lease its restaurants.

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Is that true?

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Endless shrimp did them in.

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CNN: How Red Lobster’s misguided endless shrimp promotion drove it into bankruptcy

MSN/Verify: No, Red Lobster's 'endless shrimp' deal is not the main reason the chain went bankrupt

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Can’t say what main reason was but shrimp was a factor. Thai Union cancelled two main shrimp suppliers and forced red lobster to use them at higher cost. Also made endless shrimp permanent to help get rid of their shrimp.

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I think there goal is to separate out the dining business and the real estate. Drive the dining portion into the ground by being cheap and paying rent to the real estate side. Dining portion goes under. They still hold the valuable real estate.

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Can’t say what main reason was but shrimp was a factor. Thai Union cancelled two main shrimp suppliers and forced red lobster to use them at higher cost. Also made endless shrimp permanent to help get rid of their shrimp.

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Yep, Thai Union bought them for cheap and used them to dump their shrimp. Both them and Golden Gate came out ahead in this deal. They gutted what they wanted and Thai will sell off the IP for whatever it's worth or sell Red Lobster brand stuff in the grocery stores.

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