Crimson Lobster abruptly closed the doorways of not less than 50 eating places nationwide on Monday —together with a dozen in New York and New Jersey, blindsiding seafood chain staff.
TAGeX Manufacturers, a restaurant liquidator, revealed it is auctioning off kitchen items and furniture from shuttered Crimson Lobster places as a part of its “largest restaurant gear sale ever.”
Fourteen places in New York and New Jersey had been “briefly closed” for the foreseeable future, based on Crimson Lobster’s web site, because the struggling firm weighed a possible Chapter 11 bankruptcy filing.
Among the many shutdown places are: Lakewood, NY; Buffalo, NY; Amherst, NY; Williamsville, NY; Rochester, NY; Poughkeepsie, NY; Stony Brook, NY, Kingston; NY; Scarsdale, NY; Nanuet, NY; Ledgewood, NJ; Lawrenceville, NJ; East Brunswick, NJ; Bridgewater, NJ.
Crimson Lobster — which has 649 places nationwide — has not publicly commented on the closures.
Workers and clients at a Crimson Lobster in Buffalo had been greeted with an indication taped on the glass window that marked the restaurant’s closure, according to WKBW.
“This location is closed. We sit up for serving you at one other Crimson Lobster location sooner or later,” the signal learn.
Ramon Garcia, an worker, advised the outlet that he realized of his retailer’s shutdown from a fellow employee.
Company officers allegedly solely reached out after they knowledgeable the employees that that they had three days to clear all the pieces out of the situation.
“This occurred out of nowhere. All of the those who we work with, they’re dropping their jobs and never realizing what to anticipate after that,” Garcia mentioned. “It’s taking a toll on them.”
“I didn’t know we had been going bankrupt, however I form of knew, if what I’m saying,” Garcia mentioned. “They had been slicing again on lots of stuff.”
Final month, Crimson Lobster mulled a call to file for Chapter 11 chapter to restructure their money owed, based on a report.
The seafood chain has sought recommendation from regulation agency King & Spalding on shed some long-term contracts and renegotiate a piece of its leases, folks with information of the matter advised Bloomberg.
In January, Thai Union Group PCL, a Thailand-based seafood large that owns Crimson Lobster, revealed its intention to pursue an exit of its minority investment, blaming rising prices and the COVID-19 pandemic.
“The mix of COVID-19 pandemic, sustained trade headwinds, increased rates of interest and rising materials and labor prices have impacted Crimson Lobster, leading to extended damaging monetary contributions to Thai Union and its shareholders,” Thai Union Group’s CEO Thiraphong Chansiri mentioned.
“After detailed evaluation, now we have decided that Crimson Lobster’s ongoing monetary necessities not align with our capital allocation priorities and subsequently are pursuing an exit of our minority funding.”
Thai Union paid $575 million to Golden Gate Capital, Crimson Lobster’s then-parent firm, for a 25 % stake within the restaurant chain in 2016.
The group claimed Crimson Lobster logged a share lack of $19 million throughout the first 9 months of 2023.
The restaurant additionally blamed the “Final Infinite Shrimp” deal, which permits clients to spend $20 on all-you-can-eat shrimp, for its $11 million loss within the third quarter final yr.
Union Group CFO Ludovic Regis Henri Garnier told Restaurant Business Magazine that the initiative was supposed to assist “enhance visitors” however “it didn’t work” as the costs had been raised to $25.
“We need to maintain it on the menu. And naturally we should be rather more cautious concerning what are the entry factors and what’s the worth level we’re providing for this promotion.”
In March, Crimson Lobster appointed veteran chapter skilled Jonathan Tibus as its new CEO.
Crimson Lobster has since sought a buyer to take over operations, according to CNBC.
The outlet reported final month that one agency was thinking about buying the corporate, however the deal by no means got here to fruition.
