As Red Lobster navigates choppy waters in its ongoing bankruptcy saga, court documents reveal that the seafood chain is shuttering a slew of restaurants across the nation, including three eateries in Illinois. As per NBC Chicago, if a judge approves the latest court filing, the state will see the closure of its Geneva and Bourbonnais locations as well as a Peoria establishment. The last days for these restaurants are not set in stone, but Red Lobster is pushing for lease rejections by Aug. 31.
Red Lobster's retreat from the dining scene is a remarkable turn for the once-pervasive franchise. After struggling with a mix of lease and labor expenses, the company sought Chapter 11 bankruptcy protection earlier this year and has been in talks to renegotiate leases for over 100 locations, including Bourbonnais and Michigan City. Despite some stores like Bloomingdale and Danville notably closing already, these latest closures will see 106 Red Lobster outposts dry up. Afterward, the company's presence will be significantly scaled back to around 530 locations, primarily in the U.S. and Canada, according to NBC Chicago.
Moving forward, WTTW News reports that Fortress Credit Corp., a lender skilled in restaurant management and current owner of entities such as Krystal and Logan's Roadhouse, is set to take the reins. As part of Red Lobster's move to stay afloat, Fortress extended a $100 million lifeline. The lender also plans to appoint Damola Adamolekun, P.F. Chang’s former chief executive, as Red Lobster’s CEO once it emerges from bankruptcy.
One such strategy, the perpetual $20 endless shrimp offering, reportedly caused an estimated $11 million loss. The recent court filings indicate that Red Lobster identified leases "are likely to continue to drive losses" and the company does "not anticipate needing in order to operate their business going forward and can be rejected," stated by WTTW News.
