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Red Lobster Is Reportedly Close to Filing for Bankruptcy (www.eatthis.com)

submitted 8 months ago by robocall to c/fastfood

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After facing closures and operating losses, the seafood chain is reportedly mulling a bankruptcy filing.

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[–] robocall 8 points 8 months ago (2 children)

Red Lobster took a particularly large blow in June of 2023 when it brought back its popular Ultimate Endless Shrimp deal, which allows customers to order unlimited helpings of several shrimp dishes for a set price. The deal was far more popular with customers than Red Lobster anticipated, resulting in $11 million in operating losses. The chain ultimately raised the price of the deal from $20 to $25 to help stem the bleeding.

This is an awesome downfall

[–] The_v 4 points 8 months ago

That is just a recent convenient excuse. An $11m loss on a company the size of red lobster is peanuts if it was healthy This is a seriously low effort excuse.

The chain was bought in 2014 by Golden Gate Capital. An investment firm that specializes in leveraged buyouts. Golden Gate purchased the company with borrowed money, then assigned the debt load to the company. These debts are usually assigned to actual assets. Red Lobster then had to make enough profit to cover the massively increased debt load. Aka a ticking timebomb of failure.

Golden Gate then sold the company to it's current owners.

This bankruptcy is about screwing over the non-secured debt (mostly suppliers) and fucking over employees (layoffs, pay freezes, and reduction in staffing), while the executives suck every last bit of money out of the operation.

[–] TallonMetroid 2 points 8 months ago

Not sure what they were expecting there. Of course people are going to go for unlimited helpings.