Red Lobster has suddenly closed at least 99 locations across the country with restaurants closing their doors in at least 27 states.
Tagex Brands, the company that handles restaurant liquidation auctions, told ABC News that Red Lobster recently contacted them to auction off items from 52 locations that will be closing.
The popular seafood restaurant chain began eyeing Chapter 11 debt consolidation last month. The Wall Street Journal reported Tuesday The company is now expected to file for bankruptcy “as early as next week,” according to people familiar with the matter.
In this undated photo, a Red Lobster restaurant is visible.
Jeff Greenberg/UIG via Getty Images, FILE
The decision comes just months after a major investor blamed Red Lobster’s faltering “Ultimate Endless Shrimp” promotion for costing the restaurant chain millions in losses.
During an earnings call last year, Thai Union Group, a former investor of Thailand-based Red Lobster, shared that menu promotion contributed to a third-quarter operating loss of more than $11 million.
“The thing that was different from our expectations is that the proportion of people who chose this promotion was much higher compared to expectations,” Thai Union Group CFO Ludovic Garnier told ABC News this week.
In this July 24, 2014, file photo, a shrimp combo platter is displayed beachside at a Red Lobster restaurant in Yonkers, New York.
Bloomberg via Getty Images, file
Jennifer Strix, a financial reporter and affordable lifestyle expert, explained that since “consumers are now looking for value when they go out,” she believes “consumers are already eating more than Red Lobster can afford.”
As inflation pushes more Americans to earn less, experts say consumers are turning to restaurants that can offer good value for the price, and fast-casual chains are seeing an increase in popularity.
“Red Lobster is not a fast casual environment. It may be fast seafood, but it’s still seafood [an] “An expensive dining experience,” Strix added.