Red Lobster, the world’s largest seafood restaurant chain, is on the verge of emerging from Chapter 11 bankruptcy. The company has found a new owner in RL Investor Holdings LLC, an entity backed by Fortress Investment Group. This acquisition is expected to be finalized by the end of September, marking a significant turning point for the iconic restaurant brand.
Red Lobster’s bankruptcy filing earlier this year sparked nostalgia among consumers, including Elon Musk, who have enjoyed the restaurant’s offerings over the years. The new acquisition brings a wave of optimism, with a comprehensive investment plan that includes over $60 million in fresh funding. This investment is intended to revitalize the Red Lobster brand while preserving its history and traditions.
Damola Adamolekun, the newly appointed CEO of Red Lobster, who previously led P.F. Chang’s, expressed his enthusiasm for the future. “This is a great day for Red Lobster,” he said. “With our new backers, we have a comprehensive and long-term investment plan…that will help to reinvigorate the iconic brand while keeping the best of its history.” Adamolekun succeeds Jonathan Tibus, who led the company through the reorganization process.
The reorganization will see Red Lobster operate as an independent company. Currently, the chain boasts 544 locations across 44 U.S. states and four Canadian provinces.
Red Lobster’s bankruptcy was a surprise to some in the restaurant sector. Reports suggested that an all-you-can-eat shrimp promotion, coupled with a high debt level and a 30% decline in customer visits since 2019, contributed to the financial strain.
Fortress Investment Group, known for its experience in navigating distressed businesses, is also the owner of SPB Hospitality, a restaurant group that includes Logan’s Roadhouse, Old Chicago Pizza & Taproom, and Twisted Tenders. In recent years, Fortress has acquired several companies out of bankruptcy, including Vice Media and Alamo Drafthouse.
Gordon Runté, a Fortress spokesperson, expressed confidence in Red Lobster’s future. “Red Lobster is a big undertaking, it is 500-plus locations, but we’re excited about the prospects for the restaurant.”
The news of Red Lobster’s exit from bankruptcy comes alongside the closure of 23 restaurants last week, bringing the total number of closed locations in the U.S. to 129. Red Lobster was previously owned by Darden Restaurants, which sold the chain to Golden Gate Capital in 2014 to reduce debt and focus on its Olive Garden brand.
This acquisition represents a fresh start for Red Lobster, with Fortress Investment Group bringing its expertise in revitalizing businesses to the table. The company’s focus on reinvigorating the iconic brand and providing a positive experience for its customers holds promise for the future of Red Lobster.
