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The restaurant industry is a notoriously difficult realm to thrive in, and it sounds like Red Lobster has been confronted by that reality based on a report that says the chain is on the verge of filing for bankruptcy.
In 1968, the first Red Lobster restaurant opened up its doors in Lakeland, Florida and didn’t waste much time expanding what turned out to be a burgeoning seafood empire. The growing chain was purchased by General Mills just two years later and exploded in popularity in the decades that followed while expanding its domain across the globe.
There are plenty of people out there who view Red Lobster as the kind of restaurant diners who’ve never been to a fancy restaurant think is a fancy restaurant, but the fact that it’s been going strong for close to six decades proves it’s obviously done something right (especially when it comes to the engineering of its iconic Cheddar Bay Biscuits).
Unfortunately—if you’ll forgive the use of an oceanic metaphor—it appears the tides have turned.
According to Bloomberg, sources familiar with the current state of affairs at Red Lobster say the company has been consulting with a corporate law firm as it potentially prepares to file for bankruptcy, with “onerous leases and labor costs”cited as the primary sources of its woes.
If you’re afraid the days of endless shrimp are on the verge of coming to a permanent end, there may be some good news. It sounds like Red Lobster is currently eyeing a Chapter 11 filing, which would allow it to restructure its current debts while continuing to operate the more than 600 restaurants it currently has in the United States and beyond.
With that said, it doesn’t seem like a stretch to suggest some of those outposts could end up closing as a result of this effort to—and again, I apologize—keep the ship afloat.