Although their businesses also may have contributed to that, but apparently the primary cause was that a hedge fund saw enough value in the land to eliminate the restaurants on top.
Assets tend to move to the highest value uses.
Went to one around 2004 and wow.....how the quality had deteriorated.
If Red Lobster were losing money on “all you can eat shrimp” they would have probably stopped doing that pretty quickly.
I’m sure the 400% markup didn’t help.
“RED LOBSTER’S COLLAPSE: WAS IT ALL-YOU-CAN-EAT SHRIMP, OR PRIVATE EQUITY?”
NEITHER - it was the $15+ Minimum Wage in much of the country, plus what has become an EXPECTATION of tipping 20%.
Many here, me included, have had enough and, at a minimum, go to the few restaurants where the police aren’t called if you don’t tip (mainly fast-food).
In this case, what is done cannot be undone.
The loyal customers have been forced to move on and erase
Red-Lobster-ing from their thoughts.
Same thing happened to
Sizzler. Even if they reopen in certain areas, it will require a re introduction, a reinvention of sorts.
Perhaps a new logo and color scheme to really turn heads.
No Robot Only places, please. People need local jobs.
Never offer all you can eat anything in the USA unless you wanna go broke !
very large pocketbooks
Crappy food, expensive menu, poor service and nobody fixed it is why it failed.......
If Red Lobster were a viable franchise, then the stores would relocate to lower cost land and their clientele would follow them to the new location.
I’ve seen Outback Steakhouse do this in my city. Left high priced land and moved to a cheaper area.
The fact that they’re simply closing the stores tells me that they weren’t making much money at the current location.
SO THAT’S why Red Lobster is closing down.
Now lets talk about Denny’s, Cracker-barrel, Hooters, Outback, Hardee’s, TGI Fridays, Applebee’s...
Hmmmmmmm..... Seems like there might be something going on here!
Last time I ate there the food was below Captain D’s quality.
Down with capitalism!
Private Equity and preferred supplier deals rolled them .
It’s because the dishwasher got a raise from $15/hr to $20/hr. So they had to close. /sarc
Probably some sort of sale leaseback took place, but we’re the restaurants all owned and operated by the company, or were there also franchise operations?
If corporately run, then the sale-leaseback makes sense. Not so much if there franchises as that would require much more effort and dollars.
Red Lobster also hasn’t done much to keep with the times. Basically the same menu for the past 20-30 years.
[Bascially, the land under the Red Lobster restaurants became valuable enough to buy the chain and charge the restaurants enough in rent to basically bankrupt them and then sell the land to developers.
Although their businesses also may have contributed to that, but apparently the primary cause was that a hedge fund saw enough value in the land to eliminate the restaurants on top.]
Wouldn’t have happened if they’d borrowed a crapton of money for stock buybacks!
Live by the scrimps, die by the scrimps.
So it wasn’t Big Shrimp after all?
I’m a little skeptical (the Shrimp King would have made a great supervillain), but something similar is happening with Sears/K-Mart and happened before that with Woolworths.