Red Lobster noted in its recent bankruptcy filings that it faced mismanagement issues over the past decade as the company looks to rebound over the coming weeks, according to the latest reports by Eater.
The revelation comes after the seafood chain announced it will be closing dozens of locations across the U.S., including five in California in cities like Torrance, San Diego, and Sacramento.
According to the report, the company has had five different CEOs and has been sold twice in the last decade.
Golden Gate Capital purchased Red Lobster for $2.1 billion in 2014 from Darden Restaurants, a spin-off founded by Bill Darden. Darden founded Red Lobster in Lakeland, Florida in 1968, forming Darden Restaurants, Inc.
During Golden Gate Captial’s six-year ownership, they sold off the land, increasing the restaurant’s overhead by adding lease payments, according to Business Week, and saddling it with heavy debt.
In 2020, Red Lobster was sold to Thai Union Group, one of the world’s largest seafood producers, known for the Chicken of the Sea brands. The sale led Red Lobster to focus on selling shrimp products.
Under its latest owner, the chain introduced promotions like the $19.99 all-you-can-eat shrimp scampi deal to attract customers and cut costs by using fewer ingredients.
Red Lobster filed for bankruptcy on May 20, a move that could save the failing chain from shuttering its doors completely. Prior to the filing, the company began selling off assets like kitchen equipment.
The ubiquitous restaurant chain has announced dozens of locations will close in the U.S., resulting in hundreds of employees losing their jobs.
