Red Lobster Isn't Making Its Owners Very Happy
One of Red Lobster's minority owners wants to pull out of the business.
Red Lobster has been popping up in the news recently, but not for delicious reasons like its newest shrimp flavor. Instead, the seafood chain has made headlines for its Endless Shrimp deal, which caused the restaurant to lose a wild amount of money last year. Its corporate owners are apparently none too happy about that, because investment group Thai Union, a minority owner in the brand, is planning to exit the business.
One of Red Lobster’s owners wants to sell its stake
"After detailed analysis, we have determined that Red Lobster's ongoing financial requirements no longer align with our capital allocation priorities and therefore are pursuing an exit of our minority investment," said Thai Union CEO Thiraphong Chansiri in a press release published on Thai Union's website. In other words, Thai Union wants to get the hell out of its current arrangement with the Red Lobster brand.
The press release states that Red Lobster lost $19 million in the first nine months of 2023. Most press releases highlight positive corporate initiatives and new product announcements; less common are the ones that express a company's dissatisfaction with its own properties.
Thai Union initially paid $575 million in 2016 for its minority share of Red Lobster. And though it might not be a household name, Thai Union owns a few brands you're probably familiar with, such as King Oscar, Genova, and Chicken of the Sea. Since the company's core business revolves around seafood, you can see why Red Lobster was initially of interest to Thai Union.
"The combination of Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders," said Chansiri in the press release.
This seems like something of an about-face for Thai Union, since less than a year ago the company announced its commitment to turning Red Lobster's business around. Apparently not anymore. For now, it seems, things are still business as usual for the restaurant chain; Red Lobster just added a new intriguing salt and vinegar shrimp to its menu, as well as a line of alcohol-free cocktails for the month of January. Whether these promotions might be enough to reverse the brand's fortunes in 2024 remains to be seen.