Crimson Lobster filed for Chapter 11 chapter in Florida, the corporate confirmed in an announcement late Sunday night time.
Final week, Crimson Lobster’s web site listed 87 shops listed as “briefly closed” throughout 27 states, with a few of them having their kitchen gear up for public sale on an internet restaurant liquidator.
In response to Crimson Lobster, the corporate intends to make use of the chapter proceedings to “drive operational enhancements, simplify the enterprise via a discount in places, and pursue a sale of considerably all of its property.”
Crimson Lobster, based in 1968 and headquartered in Orlando, mentioned within the assertion Sunday night time it could promote its enterprise to a brand new entity that might be wholly owned and managed by its lenders, and that “Crimson Lobster’s eating places will stay open and working as common through the Chapter 11 course of.” The corporate has been working with distributors to make sure restaurant operations are unaffected, in accordance with the assertion.
“This restructuring is the perfect path ahead for Crimson Lobster. It permits us to handle a number of monetary and operational challenges and emerge stronger and re-focused on our development,” mentioned Jonathan Tibus, the corporate’s CEO, within the assertion. “The help we have obtained from our lenders and distributors will assist make sure that we are able to full the sale course of rapidly and effectively whereas remaining centered on our staff and company.”
Here is what we all know concerning the closures, together with the place they’re occurring and why these eating places are closing.
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Crimson Lobster chapter:Crimson Lobster recordsdata for chapter days after closing dozens of places throughout the US
Which Crimson Lobster places are closed?
Every of those eating places are presently listed as briefly closed on the web site:
Alabama
Arizona
California
Colorado
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Louisiana
Maryland
Mississippi
Missouri
New Jersey
New York
North Carolina
North Dakota
Oklahoma
Pennsylvania
South Carolina
Tennessee
Texas
Virginia
Washington
Wisconsin
Who personal Crimson Lobster eating places?
Thai Union Group − which relies in Thailand − has been the most important shareholder since 2020, proudly owning 49% of the corporate. Darden Eating places initially offered off Crimson Lobster to non-public fairness agency Golden Gate Capital in 2014 for about $2.1 billion.
Crimson Lobster suffered huge losses with ‘Final Infinite Shrimp’ promotion
In 2023, the seafood chain’s “Final Infinite Shrimp” deal turned extra fashionable than anticipated, inadvertently turning into a key consider a $11 million loss within the third quarter.
The limited-time promotional deal, by which company picked two forms of shrimp to take pleasure in nonstop for $20, landed a everlasting spot on Crimson Lobster menus in June. Crimson Lobster’s dad or mum firm, Thai Union Group, mentioned in November 2023 that the chain was headed towards a $20 million loss for 2023. Now the limitless shrimp deal prices $25.
Thai Union Group CFO Ludovic Regis Henri Garnier mentioned in an earnings report name that the corporate was conscious the preliminary value for the endless-shrimp deal was low cost. The provide was supposed to attract prospects into eating places, however orders exceeded expectations, he mentioned.
“We wished to spice up our visitors, and it did not work,” Garnier informed buyers in November 2023, in accordance with Restaurant Enterprise Journal. “We need to preserve it on the menu. And naturally we should be way more cautious relating to what are the entry factors and what’s the value level we’re providing for this promotion.”
Contributing: Anthony Robledo, USA TODAY
Gabe Hauari is a nationwide trending information reporter at USA TODAY. You may observe him on X @GabeHauari or e mail him at [email protected].