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Red Lobster is considering closing more locations as it continues to reevaluate its restaurant footprint in the wake of its 2024 bankruptcy.
The seafood chain shuttered roughly 130 restaurants when it went through the bankruptcy process and Red Lobster CEO Damola Adamolekun told The Wall Street Journal in an interview that the company is continuing to review its locations and leases as it considers ways to curb costs.
Adamolekun said in the interview that visits have risen, with sales up about 10% from last year, but they haven’t recovered to pre-bankruptcy levels and many of the chain’s locations need upgrades.
“There’s a lot of positive signs, but we inherited a very damaged brand, so there’s still work to do to repair all of that,” he told the Journal.
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Red Lobster is weighing additional location closures as it continues to restructure its business. (Justin Sullivan/Getty Images)
Red Lobster filed for bankruptcy in May 2024 after it racked up steep losses amid reduced sales and losses generated from an endless shrimp deal that was originally priced at $20.
The company is also dealing with the fallout from a 2014 move that sold off ownership of the chain’s real estate and saddled the company with lease payments.
Some of those leases involve multiple restaurants, which Adamolekun said has made it difficult to close some poorly performing locations because their lease is linked with higher performing ones.
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Damola Adamolekun was named CEO of Red Lobster in August 2024. (Fortress Investment Group)
The Journal reported that people familiar with the company’s discussions said Red Lobster would ideally have dozens fewer restaurants in its portfolio so that it could focus on higher-performing locations.
Adamolekun was hired as CEO by the chain’s new ownership in August 2024 after he led a restructuring effort at P.F. Chang’s.
The company has cut roughly 10% of its corporate staff in recent months and the Journal’s report noted that Red Lobster is negotiating with seafood vendors as tariffs have pushed the costs of imported seafood higher.
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A waitress carries a tray of a lobster kettle and a crab trio dish at a Red Lobster restaurant in Yonkers, New York. (Michael Nagle/Bloomberg via Getty Images)
Adamolekun told the Journal that once the company has dealt with struggling locations, Red Lobster could look to expand in upstate New York and New England, where it has a limited presence.
He’s also considering franchise deals for international locations as well as selling more Red Lobster-branded products, like Cheddar Bay Biscuit mixes, through retail channels.
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FOX Business reached out to Red Lobster for comment.
