After struggling through bankruptcy back in May, Red Lobster is back, now managed by the 35-year-old CEO Damola Adamolekun, who was previously the CEO of P.F. Chang’s. The seafood chain recently exited bankruptcy in September following a change in ownership and an infusion of $60 million from Fortress Investment Group. Rather than completely changing the brand, Adamolekun stated to CNN that his strategy is to implement “incremental changes” moving forward.
In 2020, Thai Union, a major shrimp supplier to Red Lobster, acquired a 49% stake in the chain, becoming its largest shareholder. However, former Red Lobster employees told CNN that the company culture suffered under Thai Union’s influence, citing a toxic work environment and rapid turnover among the senior leadership level.
One of the key factors contributing to the restaurant’s bankruptcy was a $19.99 “endless shrimp” promotion that was initially introduced as a permanent menu item. The deal led to a significant loss, with Red Lobster reporting an $11 million loss in just the quarter following the deal. As a result, Thai Union exited the business earlier this year, taking a $530 million loss on its investment. While Adamolekun acknowledged the misstep, he hasn’t completely ruled out bringing back similar deals in the future.
Another controversial move under previous ownership was the removal of their hush puppies. Adamolekun recalled the backlash, telling NBC News, “There was a social media riot over taking off the hush puppies a few years ago.”
Red Lobster’s struggles also stemmed from a lack of investment, particularly with technology. The chain had lagged behind in adopting systems that help manage wait times for customers and inventory in kitchens. Customers had also voiced concerns over staffing shortages, as Red Lobster had occasionally eliminated key roles like bartenders and hosts to reduce costs.
With a customer base that skews heavily toward Baby Boomers, Adamolekun hopes to retain this loyal demographic, while also drawing in younger customers. As part of the revitalization strategy, Red Lobster plans to introduce updated restaurant “layouts, decor, lighting, music, and waiter uniforms”. The new menu will be 20% smaller, but will include nine new items, including “bacon-wrapped scallops, a lobster bisque, a lobster pappardelle, and a Parmesan-crusted chicken dish.”
Red Lobster’s journey from bankruptcy to recovery highlights the business’ resilience, showing other businesses that even when faced with significant financial setbacks, there’s potential for a fresh start. While it may take time, it is also a reminder that innovation and perseverance can help a business bounce back from failure. Best wishes to Red Lobster, as they strive to welcome both old and new seafood lovers. For those interested in what they have to offer, there is a Red Lobster in Lynwood (4231 196th St SW, Lynnwood, WA 98036) and in Federal Way (2006 S 320th St, Federal Way, WA 98003).
