Seafood chain Red Lobster is reportedly contemplating filing for bankruptcy to alleviate financial challenges, as per Bloomberg News. The company is said to be seeking guidance from law firm King & Spalding, primarily due to the strains from leases and escalating labor costs.
Majority owner Golden Gate Capital oversees the American casual dining chain, Red Lobster, based in Florida. A minority stakeholder, Thai Union Group, recorded a significant writedown of 18.4 billion Thai baht ($500 million) earlier this year, citing a loss of 800 million baht on its investment in Red Lobster in the previous year.
Thai Union Group CEO Ludovic Garnier expressed during an earnings call, “Other people stop eating beef, I’m going to stop eating lobster,” as per a transcript from S&P Global Market Intelligence.
Additionally, recent challenges like the Endless Shrimp deal have contributed to financial strain for Red Lobster’s parent company, signaling the need for strategic restructuring decisions.
Red Lobster’s potential bankruptcy filing comes amid a revolving ownership history, starting from its founders Bill Darden and Charley Woodsby in 1968. Over the years, entities like General Mills have held ownership before the chain became an independently traded company named Darden Restaurants.
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