Two additional Red Lobster locations in the Chicago area could shut down, court filings revealed, weeks after the seafood chain shuttered dozens of restaurants, including multiple in Illinois.
Red Lobster disclosed over 100 more restaurants could be closed if it's unable to negotiate leases for the locations, according to bankruptcy documents filed late May.
These are the Chicago-area locations in danger of closing:
- Bourbonnais - 1604 Illinois Route 50
- Michigan City, Indiana - 4353 Franklin St.
The chain's restaurant in downstate Champaign could also be on the chopping block.
In court documents, Red Lobster listed 228 rejected leases that the company determined will keep losing money if they continue operating as-is. However, the list included some of the 93 restaurants that already closed on May 14. Bloomingdale and Danville restaurants were among those shut down that day.
Red Lobster filed for Chapter 11 bankruptcy days later, continuing the process to shrink its footprint and find a buyer, according to a statement.
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The seafood chain has been struggling with rising lease and labor costs in recent years and also promotions like its iconic all-you-can-eat shrimp deal that backfired.
Demand for one such recent promotion overwhelmed restaurants, reportedly contributing to millions in losses.
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The seafood restaurant chain said in a previously court filing that it has more than 100,000 creditors and estimated assets between $1 billion and $10 billion. The company’s estimated liabilities are between $1 billion and $10 billion.
The bankruptcy petition is signed by CEO Jonathan Tibus, a corporate restructuring specialist who took the top post at Red Lobster in March.
In the filing, Tibus blamed a “difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry” for the chain’s need to file for Chapter 11 protection.
Maintaining stability at the Florida chain has been problematic due to multiple ownership changes over its 56-year history. Earlier this year, Red Lobster co-owner Thai Union Group, one of the world’s largest seafood suppliers, announced its intention to exit its minority investment in the dining chain.
Thai Union first invested in Red Lobster in 2016 and upped its stake in 2020. At the time of the January announcement on its plans to divest, CEO Thiraphong Chansiri said the COVID-19 pandemic, industry headwinds and rising operating costs had hit the dining chain hard and caused “prolonged negative financial contributions to Thai Union and its shareholders.”
For the first nine months of 2023, the Thailand company reported a $19 million share of loss from Red Lobster.
Red Lobster’s roots date back to 1968, when the first restaurant opened in Lakeland, Florida. The chain expanded rapidly since then and runs more than 700 locations worldwide.