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Red Lobster Shutters Several Restaurants Amid Bankruptcy Reports

Red Lobster has abruptly closed down approximately 50 restaurants across 27 states as part of its “footprint rationalization” plan, according to online restaurant liquidator TAGeX Brands.

The liquidator also reported that it is auctioning off the closed restaurants’ equipment. The auction will end on Thursday and each winner will receive the “entire contents of the Red Lobster location they bid on”, making the liquidation as “the largest restaurant equipment auction event ever.”

The restaurant chain’s founder and CEO Neal Sherman said in a statement that the online auctions would “prevent high-quality items from being discarded in landfills” and promote sustainable reuse.

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The mass closure comes as Red Lobster is considering filing for bankruptcy to restructure its debt as lease, labor and other costs kept piling up in the recent years, Bloomberg reports.

Also, frequent changes in management might have contributed to the seafood chain’s downfall.

Last year, Red Lobster introduced a $20 “Ultimate Endless Shrimp”, an all-you-can-eat deal, to attract customers. However, the deal led the company to $11 million loss in the third quarter.

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