What happened to the Red Lobster of the ’80s and ‘90s? Like so many beloved brands, it got caught in the net of private equity before being reeled in and gutted.

First, Red Lobster got screwed by private equity. Then, it got screwed by its own managers.

Back in 2014, the Darden restaurant group spun off Red Lobster to a private equity firm.

          To finance the deal, that PE firm sold off most of Red Lobster’s property assets and then leased them back to the restaurants. 
          But, as we learned in the bankruptcy filing, the vast majority of those restaurants were being charged rent at above market rates.

Red Lobster was hit with “financial and operational challenges” — namely, the one-two punch of the pandemic and the price inflation it set off, followed by

         the bone-headed strategic blunders that left the restaurant with $1 billion in debt and less than $30 million in cash on hand.

          The all-you-can-eat shrimp deal alone didn’t doom Red Lobster, 

The promotion had historically been a limited time thing, and it was a huge hit. Twenty bucks, for all the shrimp? Sign me up! Of course, that’s how every other crustacean-consuming American responded. Because in this country, “all you can eat” is as much a dare as it is a deal. And the lingering hangover of inflation left everyone hungry for a $20 meal that could conceivably provide a week’s worth of sustenance in a single sitting.

It cost Red Lobster $11 million over three months.

What happened to the Red Lobster of the ’80s and ‘90s? Like so many beloved brands,

              it got caught in the net of private equity before being reeled in and gutted.

https://www.cnn.com/2024/05/20/investing/red-lobster-restaurants-bankruptcy/index.html?

But recent mismanagement, competition, inflation and other factors brought down Red Lobster, analysts and former Red Lobster employees say.

                “Years of underinvestment in Red Lobster’s marketing, food quality, service and restaurant upgrades hurt the chain’s ability to 
                  compete with growing fast-casual and quick-service chains.”

Aka….The quickie paper profits that far right extremists libertarians bros call ‘free market ‘ ….🤔
Dismantling America economy system.