Red Lobster’s new CEO Damola Adamolekun admitted that its $20 endless shrimp offering – which contributed to the restaurant filing for bankruptcy – stressed out staff and created “a lot of chaos.”
Admolekun, 35, was chosen to take over the flailing company in August, after the Orlando-based chain abruptly closed 100 locations and filed for Chapter 11 protection.
“Endless Shrimp” promotion First launched in 2004 And originally only lasted a week, but went bust after the company made it a permanent item on the menu in May 2023. Leaders underestimated how popular it would be and the company lost an estimated $20 million that year.
“You insist on the kitchen. You put pressure on the server. You put pressure on the host,” Adamolekun told CNN. “People can’t get a table. “It creates a lot of chaos operationally.”
The Orlando-based company filed for bankruptcy protection in May 2024.
Then-CEO Jonathan Tibbs blamed the previous CEO, Paul Kenny, for perpetuating the endless shrimp promotion to customers “despite significant opposition from other members of the company’s management team.” According to the bankruptcy filing,
The filing said the chain suffered a major shrimp shortage and caused problems in “the company’s normal supply chain and demand planning processes.”
In August, a US bankruptcy judge approved the company’s restructuring plan to exit Chapter 11 bankruptcy protection and sell to a lender group led by asset manager Fortress.
Red Lobster had 650 locations before endless lobster promotions caused its largest shareholder, Thai Union, to suffer losses Write off $530 million In the fourth quarter of 2023. During the bankruptcy process, more than 50 locations were even equipment auction As part of liquidation.
Despite huge funding problems, Red Lobster is still afloat three level space The rent in Times Square is $2.2 million per year.
Now, only 545 places left In America.
Adamolekun, who was previously CEO of PF Chang, expects it will be easier to move forward with a long-term investment plan that includes a commitment to more than $60 million in new funding.
“The future of Red Lobster is tremendous and I can’t wait to get started on my plans with the company’s more than 30,000 team members across the U.S. and Canada,” Admolekun said in September.
Red Lobster has Five CEOs from 2021 And in its 56-year history, there have been several ownership changes, including being sold to General Mills, Darden Restaurants and a private equity firm in 2014.
Adamolekun said the Endless Shrimp could return to the menu later only if it does not create the same problems.
”I don’t want to say never, but certainly not the way it was done,” he said. “We wouldn’t have it like that losing money and not being able to manage it.”