Commissar SFLUFAN Posted May 21 Share Posted May 21 Red Lobster files for bankruptcy after missteps including all-you-can-eat shrimp WWW.NPR.ORG The seafood chain is in hot water after a series of bad choices by a parade of executives. Almost 580 restaurants will stay open, after dozens closed abruptly last week. Quote A private equity firm bought the chain ten years ago from Darden Restaurants, which owns rivals Olive Garden and LongHorn Steakhouse. The firm, Golden Gate Capital, funded the deal partly by selling Red Lobster's real estate. That meant the chain had to start paying rent. That's now a major financial factor in Red Lobster's bankruptcy filing, which asks the court to reject 108 leases, letting the company abandon those locations. Since 2020, Red Lobster has been run by its largest shareholder: Thai Union Group, a seafood supplier also behind the Chicken of the Sea brand. And the bankruptcy filing lays much blame on Thai Union and ex-CEO Paul Kenny. After massive financial losses during the pandemic, followed by increases in the costs of food and wages, Thai Union pursued extensive cost-cutting at Red Lobster. The chain was run by a conveyor belt of executives; it had no CEO for a year. The bankruptcy filing alleges that Thai Union interfered with daily operations and even pushed out two rival suppliers of breaded shrimp, securing a costlier exclusive deal for itself. Quote All-you-can-eat shrimp fiasco Then came a reboot idea that turned into a jumbo disaster: Ultimate Endless Shrimp. Red Lobster took its classic promotion and made it permanent, with prices originally starting at $20. Thai Union later cited this as the main cause of its $11 million loss that quarter. The goal was to get more people in the door, which did happen. But many diners then stayed for hours, picking at plate after plate of shrimp dishes and — critically — buying little else. Thai Union CEO Thiraphong Chansiri later said the ordeal left him scarred. "Other people stop eating beef, I'm going to stop eating lobster," he told investors. In January, Thai Union washed its hands of Red Lobster. The owners said they would essentially abandon their stake in the chain, setting the restaurant company on a path to bankruptcy. Quote Link to comment Share on other sites More sharing options...
marioandsonic Posted May 21 Share Posted May 21 *updoots* Quote Link to comment Share on other sites More sharing options...
b_m_b_m_b_m Posted May 21 Share Posted May 21 All you can eat shrimp* is the cause *private equity takeover and “value extraction” 1 Quote Link to comment Share on other sites More sharing options...
thewhyteboar Posted May 21 Share Posted May 21 The answer to the question “Why does X suck now?” or “Why did X fail?” is always private equity. 5 Quote Link to comment Share on other sites More sharing options...
osxmatt Posted May 21 Share Posted May 21 9 1 Quote Link to comment Share on other sites More sharing options...
Kal-El814 Posted May 21 Share Posted May 21 Never go full Flight of the Conchords. Quote Bret, how much are you selling those superstraws for? One dollar. How many straws does it take to make a superstraw? Five. What's the total cost of those five straws? Two-fift... oh. Well I've sold quite a few of them. 2 Quote Link to comment Share on other sites More sharing options...
Keyser_Soze Posted May 21 Share Posted May 21 They were most likely murdered by themselves. I've never eaten at one and I've walked by some several times and they always smell like shit outside. Quote Link to comment Share on other sites More sharing options...
Brick Posted May 21 Share Posted May 21 I've never actually gone to Red Lobster, even though I kind of always wanted to since I like seafood, although I know there are better seafood places I could probably go to. Quote Link to comment Share on other sites More sharing options...
Uaarkson Posted May 21 Share Posted May 21 It’s garbage, like any suburban chain restaurant. Good riddance Quote Link to comment Share on other sites More sharing options...
Uaarkson Posted May 21 Share Posted May 21 Black community on suicide watch rn tho Quote Link to comment Share on other sites More sharing options...
Keyser_Soze Posted May 21 Share Posted May 21 11 minutes ago, Uaarkson said: Black community on suicide watch rn tho Joe's Crab Shack is still around. 1 Quote Link to comment Share on other sites More sharing options...
GeneticBlueprint Posted May 21 Share Posted May 21 2 hours ago, b_m_b_m_b_m said: All you can eat shrimp* is the cause *private equity takeover and “value extraction” “Endless shrimp” is how I’ve always referred to private equity anyways. 1 2 Quote Link to comment Share on other sites More sharing options...
stepee Posted May 21 Share Posted May 21 8 minutes ago, GeneticBlueprint said: “Endless shrimp” is how I’ve always referred to private equity anyways. I hate seeing my band name used like this! 1 Quote Link to comment Share on other sites More sharing options...
b_m_b_m_b_m Posted May 21 Share Posted May 21 8 hours ago, Uaarkson said: It’s garbage, like any suburban chain restaurant. Good riddance And the only good part, the cheddar biscuits, can be purchased at the grocery store. Quote Link to comment Share on other sites More sharing options...
ort Posted May 21 Share Posted May 21 I won the heart of my wife by eating 100 shrimp at a Red Lobster roughly 25 years ago. 2 Quote Link to comment Share on other sites More sharing options...
b_m_b_m_b_m Posted May 21 Share Posted May 21 Endless shrimp is the name of the PE firm that did this owned by a Gen x er who swears they are cool because they still listen to Pearl Jam and Dave Matthew’s Band Quote Link to comment Share on other sites More sharing options...
Spork3245 Posted May 21 Share Posted May 21 19 minutes ago, ort said: I won the heart of my wife by eating 100 shrimp at a Red Lobster roughly 25 years ago. 1 Quote Link to comment Share on other sites More sharing options...
Jason Posted May 21 Share Posted May 21 30 minutes ago, ort said: I won the heart of my wife by eating 100 shrimp at a Red Lobster roughly 25 years ago. 2 Quote Link to comment Share on other sites More sharing options...
chakoo Posted May 21 Share Posted May 21 Quote Link to comment Share on other sites More sharing options...
TyphoidHater Posted May 21 Share Posted May 21 To me, it's crazy how the purchase was funded in part by something they didn't own until after the purchase. Guess that's why I'm not in finance. Quote Link to comment Share on other sites More sharing options...
CitizenVectron Posted May 21 Share Posted May 21 38 minutes ago, TyphoidHater said: To me, it's crazy how the purchase was funded in part by something they didn't own until after the purchase. Guess that's why I'm not in finance. Private equity is a scam to disassemble companies and transfer their value to rich people. Basically: Offer to buy company using debt That debt is assigned to the company purchased and must be paid by them Profits (from operations or selling off) are given to rich people who did the sale Company can't service debt used to purchase them, must declare bankruptcy and sell off parts to pay for it It's crazy to me that the debt used to purchase a company can be serviced by the company purchased, and not be 100% attached to the people who did the buying. Obviously it's more complicated than the four points above, but that's the gist. It's the grift of our age. 1 1 1 1 1 Quote Link to comment Share on other sites More sharing options...
outsida Posted May 21 Share Posted May 21 Leveraged debt buyouts should be illegal because it’s basically a scam 1 Quote Link to comment Share on other sites More sharing options...
ThreePi Posted May 21 Share Posted May 21 Have there been any examples of private equity of actually rescuing a struggling company? Quote Link to comment Share on other sites More sharing options...
Spork3245 Posted May 21 Share Posted May 21 4 minutes ago, ThreePi said: Have there been any examples of private equity of actually rescuing a struggling company? I want to say PetSmart but I'm too lazy to double check Quote Link to comment Share on other sites More sharing options...
outsida Posted May 21 Share Posted May 21 2 hours ago, ThreePi said: Have there been any examples of private equity of actually rescuing a struggling company? Quote Link to comment Share on other sites More sharing options...
Nokra Posted May 21 Share Posted May 21 8 hours ago, b_m_b_m_b_m said: And the only good part, the cheddar biscuits, can be purchased at the grocery store. And the recipe found online. Quote Link to comment Share on other sites More sharing options...
ort Posted May 21 Share Posted May 21 FACT! You can make em better at home. They're basically a ball of cheese, salt and butter held together by a little bit of flour. I don't think Red Lobster is as bad as it's reputation, but at the end of the day, it ain't great, that's for sure. I haven't been to one in like 5 or 6 years. My youngest used to want to go there for his family birthday dinners, but that phase has ended. I used to have like 5 in the area but I believe we're down to one. COVID killed off most of the locations in my area. 1 Quote Link to comment Share on other sites More sharing options...
LazyPiranha Posted May 21 Share Posted May 21 I haven’t been to a Red Lobster in… 15 years? They were never bad but they were also never good. I dunno, casual dining prices have risen to the point where the juice isn’t worth the squeeze most of the time. Quote Link to comment Share on other sites More sharing options...
thewhyteboar Posted May 21 Share Posted May 21 6 hours ago, CitizenVectron said: Private equity is a scam to disassemble companies and transfer their value to rich people. Basically: Offer to buy company using debt That debt is assigned to the company purchased and must be paid by them Profits (from operations or selling off) are given to rich people who did the sale Company can't service debt used to purchase them, must declare bankruptcy and sell off parts to pay for it It's crazy to me that the debt used to purchase a company can be serviced by the company purchased, and not be 100% attached to the people who did the buying. Obviously it's more complicated than the four points above, but that's the gist. It's the grift of our age. The famous quote (I'm paraphrasing) is that, if you want to buy a $3000 shoe-shine stand, you need to have $3000 in cash. But if you want to buy a billion dollar company, you don't need to have anything at all. Quote Link to comment Share on other sites More sharing options...
b_m_b_m_b_m Posted May 21 Share Posted May 21 11 minutes ago, thewhyteboar said: The famous quote (I'm paraphrasing) is that, if you want to buy a $3000 shoe-shine stand, you need to have $3000 in cash. But if you want to buy a billion dollar company, you don't need to have anything at all. You need to know the right people is it Quote Link to comment Share on other sites More sharing options...
GeneticBlueprint Posted May 22 Share Posted May 22 I’ve never actually been to Red Lobster that I can remember. But I totally would’ve gotten that endless shrimp private equity and helped the bankruptcy to occur so it’s probably good that I didn’t. Quote Link to comment Share on other sites More sharing options...
ThreePi Posted May 22 Share Posted May 22 I went to a Red Lobster for the first in about a month ago. Was alright, I suppose. Biscuits were pretty good. Quote Link to comment Share on other sites More sharing options...
skillzdadirecta Posted May 22 Share Posted May 22 Growing up Red Lobster was fine dining for us... we went there for damn near every special occasion, Birthdays, graduations, funerals... Hadn't been to one in tears until a couple of years ago when I hung out with my nephews at one. Food tasted a lot better in my memories than it did in reality. Cheddar bisuits are still good though. Quote Link to comment Share on other sites More sharing options...
outsida Posted May 22 Share Posted May 22 The Cheddar biscuits are fire! Quote Link to comment Share on other sites More sharing options...
Commissar SFLUFAN Posted May 22 Author Share Posted May 22 My mom and dad absolutely loved the Red Lobster in Coral Springs and we'd often go there after Mass on Sundays. Burn in hell, private equity. 1 Quote Link to comment Share on other sites More sharing options...
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