Red Lobster has ” temporarily closed ” its restaurants on Route 22 in Bridgewater and Route 18 in East Brunswick as the chain is scrambling to avoid going out of business.
According to its website, Red Lobster has temporarily closed 87 stores in 27 states.
The Red Lobster restaurants on Hadley Road in South Plainfield and on Route 22 in Union remain open.
Red Lobster has also hired an online restaurant liquidator, TAGeX Brands, to auction off kitchen equipment from 48 locations nationwide, including one on Route 10 in the Morris County community of Ledgewood.
The seafood chain considered filing for Chapter 11 bankruptcy in April in an effort to restructure its debt, according to Bloomberg.
The company had been getting advice from law firm King & Spalding as it looked to shed some long-term contracts and renegotiate leases, Bloomberg reported, noting that Red Lobster’s cash flows had been weighed down by leases and labor costs, among other issues.
Red Lobster closures:Red Lobster website lists 87 restaurant locations ‘temporarily closed’ in 27 states: See full list
‘Endless Shrimp’ deal costs Red Lobster:Red Lobster’s ‘Endless Shrimp’ deal surpassed expectations, cost company millions
‘Ultimate Endless Shrimp’ promotion led to big losses for Red Lobster
In 2023, the seafood chain’s “Ultimate Endless Shrimp” deal became more popular than expected, inadvertently becoming a key factor in a $11 million loss in the third quarter.
The limited-time promotional deal, in which guests picked two types of shrimp to enjoy nonstop for $20, landed a permanent spot on Red Lobster menus in June. Red Lobster’s parent company, Thai Union Group, said in November 2023 that the chain was headed toward a $20 million loss for 2023.
Now the endless shrimp deal costs $25.
Thai Union Group CFO Ludovic Regis Henri Garnier said in an earnings report call that the company was aware the initial price for the endless-shrimp deal was cheap. The offer was intended to draw customers into restaurants, but orders exceeded expectations, he said.
“We wanted to boost our traffic, and it didn’t work,” Garnier told investors in November 2023, according to Restaurant Business Magazine. “We want to keep it on the menu. And of course we need to be much more careful regarding what are the entry points and what is the price point we are offering for this promotion.”
Mike Deak of MyCentralJersey.com contributed to this story.
Gabe Hauari is a trending news reporter for USA TODAY.
First appeared on www.mycentraljersey.com