Red Lobster suffered tremendously for its famous $20 Endless Shrimp promotion that is considered a major factor in the company’s near-extinction.
Currently, Damola Adamolekun, the new CEO of Red Lobster, is stepping into a challenging situation at just 35 years old. In his first interview, he acknowledged the difficulties ahead with CNN.
He expressed his first memory of visiting a Red Lobster when he dined there with his family in Springfield after church. It was a special occasion where he got to try lobster and crack crab legs for the first time, something he felt that is considered special to many Americans.
He believes in the company because of its self-proclaimed title as the “first really successful casual dining chain in America at scale,” that quickly expanded during the 70s and 80s thanks to Bill Darden. Adamolekun is also drawn to Red Lobster’s cultural references such as being a place where some celebrities worked before becoming famous. It is a place also mentioned in songs and seen in movies.
Previously, Red Lobster filed for Chapter 11 bankruptcy and closed multiple locations while seeking to streamline operations and reduce its restaurant count. With liabilities estimated between $1 billion and $10 billion, the company aimed to stabilize its finances with a $100 million financing commitment from lenders and a “stalking horse purchase agreement” to sell the business to its current lenders.
Under the leadership of former CEO Jonathan Tibus, the restructuring addressed financial challenges and positioned the brand for future growth. An online auction for equipment from closed restaurants was conducted, highlighting the extensive operational cuts. There was speculation that reducing the number of locations might have increased demand, and suggestions emerged for a “Save Red Lobster” crowdfunding campaign to engage loyal customers. After successfully navigating the restructuring process, Red Lobster emerged from bankruptcy, combining operational changes with community support to ensure its revival.
