At least 99 locations of Red Lobster are being auctioned off amid questions about the stalwart seafood chain’s long-term future.
In a post Monday on LinkedIn, Neal Sherman, founder and CEO of TAGeX Brands, a liquidation firm, announced he was leading the closure of more than 50 Red Lobster locations, with the restaurants’ equipment to be auctioned off.
A web page dedicated to the liquidations showed closure locations across the U.S. including in Denver; Indianapolis; Rochester, New York; Sacramento, California; San Antonio; and San Diego.
On Tuesday, Restaurant Business Magazine reported 99 locations were closing.
The closures represent about 15% of the company’s approximately 700 locations, though it remains the largest seafood restaurant chain in the U.S.
Red Lobster has struggled with a significant debt load, unfavorable lease terms, executive turnover and ill-advised strategies including an all-you-can-eat-shrimp promotion last fall that resulted in a significant loss for the company.
Last month, CNBC reported Red Lobster was seeking a buyer as it looked to avoid a bankruptcy filing, but none have materialized.
Earlier this year, Thai Union, the largest investor in Red Lobster, announced it was seeking to exit its position.
“The combination of Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders,” Thiraphong Chansiri, Thai Union Group’s CEO, said in a statement.
“After detailed analysis, we have determined that Red Lobster’s ongoing financial requirements no longer align with our capital allocation priorities and therefore are pursuing an exit of our minority investment.”
Red Lobster did not immediately respond to a request for comment.