Red Lobster Considering Bankruptcy Filing

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Red Lobster Considering Bankruptcy Filing

Post by J-Man »

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Re: Red Lobster Considering Bankruptcy Filing

Post by Super S »

Making Endless Shrimp a permanent menu item was certainly a factor. That should be something offered only during certain times or maybe just once a year.
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Re: Red Lobster Considering Bankruptcy Filing

Post by buckguy »

Endless shrimp was probably the least of their problems. The food has been going down hill for a long time.
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Re: Red Lobster Considering Bankruptcy Filing

Post by ClownLoach »

Interesting because ten years ago Darden separated Red Lobster and was crucified as if they had sold off their best asset. They must have known something back then, maybe some bad lease deals. Darden is still growing and adding restaurants while Red Lobster has been downsizing and struggling to maintain quality. They look like geniuses now for this move. Sounds like some Private Equity people were involved too, what a surprise. They can find incredible ways to kill anything. In Oceanside about ten years ago the restaurant was so busy they had to relocate several doors down to a larger facility. Now it's closed entirely, brand new building with their newest prototype.

I want to start my own PE firm, Golden Goose Slaughterhouse Funds. The logo will be a cartoon golden goose lying dead on the ground with the cartoon "X"s over the eyes. At least our branding will be accurate, although it's hard to compete with Cerberus.
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Re: Red Lobster Considering Bankruptcy Filing

Post by storewanderer »

I think the chain would be in a stronger position had Darden kept it. Darden knows how to operate restaurants and make money. Food may not be great but they are good at managing what they have and good at brand management.

Seafood pricing hasn't inflated to the extent of other categories the past couple years. Of course other costs like rent, labor, etc. have gone up but this chain is very lucky the main product it serves has been quite stable on cost. I can only imagine how much trouble they'd be in if they primarily served most other food types that have all had giant cost spikes.
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Re: Red Lobster Considering Bankruptcy Filing

Post by pseudo3d »

ClownLoach wrote: April 18th, 2024, 11:35 pm Interesting because ten years ago Darden separated Red Lobster and was crucified as if they had sold off their best asset. They must have known something back then, maybe some bad lease deals. Darden is still growing and adding restaurants while Red Lobster has been downsizing and struggling to maintain quality. They look like geniuses now for this move. Sounds like some Private Equity people were involved too, what a surprise. They can find incredible ways to kill anything. In Oceanside about ten years ago the restaurant was so busy they had to relocate several doors down to a larger facility. Now it's closed entirely, brand new building with their newest prototype.

I want to start my own PE firm, Golden Goose Slaughterhouse Funds. The logo will be a cartoon golden goose lying dead on the ground with the cartoon "X"s over the eyes. At least our branding will be accurate, although it's hard to compete with Cerberus.
Red Lobster WAS struggling a decade ago. From this article:
Darden first announced in December that it would seek to spin off or sell its long-struggling Red Lobster chain, which had failed for several quarters to reverse declining sales and traffic similarly to Darden’s other flagship casual-dining brand, Olive Garden.
It is purely revisionism that Red Lobster was doing fine and Darden decided to sell it off.
Last edited by pseudo3d on April 19th, 2024, 11:47 am, edited 1 time in total.
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Re: Red Lobster Considering Bankruptcy Filing

Post by veteran+ »

ClownLoach wrote: April 18th, 2024, 11:35 pm Interesting because ten years ago Darden separated Red Lobster and was crucified as if they had sold off their best asset. They must have known something back then, maybe some bad lease deals. Darden is still growing and adding restaurants while Red Lobster has been downsizing and struggling to maintain quality. They look like geniuses now for this move. Sounds like some Private Equity people were involved too, what a surprise. They can find incredible ways to kill anything. In Oceanside about ten years ago the restaurant was so busy they had to relocate several doors down to a larger facility. Now it's closed entirely, brand new building with their newest prototype.

I want to start my own PE firm, Golden Goose Slaughterhouse Funds. The logo will be a cartoon golden goose lying dead on the ground with the cartoon "X"s over the eyes. At least our branding will be accurate, although it's hard to compete with Cerberus.
:lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:

LOVE IT!!
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Re: Red Lobster Considering Bankruptcy Filing

Post by ClownLoach »

pseudo3d wrote: April 19th, 2024, 7:45 am
ClownLoach wrote: April 18th, 2024, 11:35 pm Interesting because ten years ago Darden separated Red Lobster and was crucified as if they had sold off their best asset. They must have known something back then, maybe some bad lease deals. Darden is still growing and adding restaurants while Red Lobster has been downsizing and struggling to maintain quality. They look like geniuses now for this move. Sounds like some Private Equity people were involved too, what a surprise. They can find incredible ways to kill anything. In Oceanside about ten years ago the restaurant was so busy they had to relocate several doors down to a larger facility. Now it's closed entirely, brand new building with their newest prototype.

I want to start my own PE firm, Golden Goose Slaughterhouse Funds. The logo will be a cartoon golden goose lying dead on the ground with the cartoon "X"s over the eyes. At least our branding will be accurate, although it's hard to compete with Cerberus.
Red Lobster WAS struggling a decade ago. From this article:
Darden first announced in December that it would seek to spin off or sell its long-struggling Red Lobster chain, which had failed for several quarters to reverse declining sales and traffic similarly to Darden’s other flagship casual-dining brand, Olive Garden.
It is purely revisionism that Red Lobster was doing fine and Darden decided to sell it off.
Where did I say it was doing fine besides that location which was rather emblematic of their performance in the SoCal market based on my management of multiple stores where I had to deal with the headache of their restaurants clogging my parking lots so my customers couldn't find a place to park to shop my stores?

There was definitely controversy about the transaction. They had multiple activist firms that were very unhappy that Darden didn't "extract more" and had given away valuable assets in this deal. It was widely criticized. Sure it wasn't performing a decade ago, why would they get rid of a good asset? My whole point is that ten years ago Darden was made out to be a bunch of clowns for unloading Red Lobster in the manner they did, but now it looks like a pretty good deal. Red Lobster could have taken down the entire Darden company.

And as far as bad performance a decade ago, it was a few negative comp points and six closures which isn't great but not bankruptcy worthy, heck that's why it sold for so much (and activists thought it should have gone for more). Now practically all the business is gone if you can even find a location that is still open. You see empty dining rooms now when ten years ago you still needed to wait for a table. Comparing ten years ago to how is comparing having the sniffles to being on one's death bed.

Proving my point, here is the quote from your article from the PE buyers, the dubious Golden Gate Capital firm. Doesn't sound like they thought they were buying a dying, collapsing restaurant chain. Sounds like everything was fine to the buyers... Your source again, not mine.

"Josh Olshansky, Golden Gate’s managing director, said in a statement that Red Lobster was “an exceptionally strong brand with an unparalleled market position in seafood casual dining. Red Lobster is exactly the type of company in which we seek to invest given its great brand profile and strong management team,” Olshansky said. “We see significant opportunities for future growth by partnering with Kim Lopdrup and the management team to support the long-term success of Red Lobster.”

They "grew" it into bankruptcy. Surprise, surprise. That private equity "Golden Touch" from Golden Gate...
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Re: Red Lobster Considering Bankruptcy Filing

Post by Bagels »

In fairness, Red Lobster was never that big in SoCal. I’m thinking that it could not compete with plethora of fresh seafood as well as Asian restaurants throughout the area. California Fish Grill is a better product IMO, although it’s not sit down.

We sometimes go to the location in Garden Grove. It was the first place we visited when I first went to California as a kid… hasn’t really changed much all these years later. The specials are a great buy but the menu is so so. I really don’t want to pay over $30 (tax and tip) for a plate of fried shrimp and baked potatoe. .
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Re: Red Lobster Considering Bankruptcy Filing

Post by Super S »

I generally have had good experiences with Red Lobster. While their prices can seem high at times, they aren't really out of line at least in my area. They do have good specials. There are a lot of locally owned restaurants that I have attempted to support, and really leave a lot to be desired in food and service. Red lobster is one of the better places to eat in my area.

My observation is that they seem to do better in smaller towns where there are fewer options.
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