Red Lobster May Shut Down 135 More Restaurants After Bankruptcy Filing

Red Lobster may need to close over 100 more locations if it cannot negotiate lower rent costs for its buildings, according to court documents.

A Red Lobster restaurant is shown September 13, 2016, in North Miami, Florida. (AP Photo/Wilfredo Lee)

The company reportedly filed for bankruptcy with $300 million in debt, attributing the financial woes to inflation, unsuccessful promotions like the $20 all-you-can-eat shrimp deal, and high rent costs.

Red Lobster’s 22-year-old lease at its iconic Times Square location in New York is reportedly set to double to $2.2 million annually, the New York Post reported. 

A Red Lobster restaurant in Times Square in New York is seen on Friday April 30, 2010. (Richard Levine/Corbis via Getty)

The company is trying to keep the long-standing location, but it has only a few weeks to agree to the new lease before it starts on June 30. 

Red Lobster in Leesburg, Florida, on May 15, 2023. (Stephen M. Dowell/Orlando Sentinel/Tribune News Service via Getty Images)

Despite a 4 percent increase in foot traffic during the shrimp promotion, it proved unprofitable as many customers came solely for the cheap shrimp. 

Even after raising the price to $25 for the endless shellfish deal, the company still suffered significant financial losses.