Multiple reports suggest that Red Lobster may face the closure of over 100 additional locations across the United States if the company fails to renegotiate their leases.
According to a recent court document, the seafood chain, currently facing financial difficulties, has indicated that 228 leases that were rejected could be losing money under the current operations. CNN had previously reported that several of these restaurants had suddenly closed in May, and also published a list of those that were at risk of closure.
As of now, there are around 135 additional locations that face the possibility of closing down. This includes almost 20 establishments in Florida, which is the state with the highest number of locations on the list.
According to the New York Post, Red Lobster might be closing its flagship restaurant located in Times Square. The lease is set to expire by the end of June, and it would cost roughly $2.2 million annually in rent for the company to continue operating. It was reported earlier that Red Lobster was in negotiations with the property’s landlords to try and work out new terms.
Nexstar has reached out to Red Lobster for comment on the possibility of new closures, but as of now, no response has been received.
According to CNN, the closure of four out of eight Arkansas locations is anticipated. The affected locations include Fort Smith, Fayetteville, Hot Springs, and Markham Street in Little Rock.
Last month, the 56-year-old company made an announcement about filing for Chapter 11 bankruptcy. The company has faced several financial challenges recently, which includes the consequence of rising labor costs and all-you-can-eat promotions that didn’t work as expected.
According to a press release issued on May 19th, Red Lobster CEO Jonathan Tibus stated that the company’s restructuring is the most viable solution to tackle various financial and operational hurdles, while also positioning the brand for growth.
Last month, Aaron Allen, who founded Aaron Allen & Associates, a restaurant consulting firm, revealed in an interview with the Associated Press that Red Lobster had attempted to compete with fast and affordable chains such as Chipotle and Panera by lowering its prices. However, according to Allen, this strategy backfired and resulted in disastrous consequences for the seafood chain.
The history of the company has been marred by several ownership changes, making it challenging to maintain a steady management system. Recently, Thai Union Group, one of the leading seafood suppliers globally and a co-owner of Red Lobster, declared its plans to withdraw its minority investment in the chain earlier this year.
In 1968, Red Lobster opened its first restaurant in Lakeland, Florida, marking the beginning of its journey. As of now, the restaurant has expanded to more than 700 locations across the globe.