Red Lobster likely closing more restaurants after shuttering 130: CEO

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Red Lobster Considers Closing More Locations Following 2024 Bankruptcy

Red Lobster is contemplating the closure of additional locations as part of its ongoing assessment of its restaurant presence following its bankruptcy in 2024.

The seafood chain closed around 130 restaurants during the bankruptcy proceedings. CEO Damola Adamolekun shared with The Wall Street Journal that the company is currently reviewing its locations and leases to find ways to reduce costs.

While there has been a slight increase in visits and sales are up by approximately 10% compared to last year, they have not yet reached pre-bankruptcy levels. Many of Red Lobster’s locations require upgrades, according to Adamolekun.

Despite positive signs, Adamolekun acknowledged that the brand still needs significant repair work due to the challenges inherited from the bankruptcy.

Following the bankruptcy in May 2024, caused by substantial losses from reduced sales and a failed promotional deal, Red Lobster is also dealing with the aftermath of a 2014 decision to sell off its real estate, resulting in lease obligations.

Some leases cover multiple restaurants, complicating the closure of underperforming locations as they are linked with more successful ones, as per Adamolekun.

Red Lobster CEO Damola Adamolekun told The Wall Street Journal that the restaurant chain will likely close more locations in the wake of its 2024 bankruptcy. ABC via Getty Images

Reports suggest that Red Lobster aims to reduce its portfolio by dozens of restaurants to focus on higher-performing locations.

Adamolekun, who was appointed as CEO in August 2024, following a successful restructuring at P.F. Chang’s, mentioned that the company has recently cut about 10% of its corporate staff. Additionally, negotiations with seafood vendors are underway due to increased tariffs on imported seafood.