American restaurant chain Red Lobster has opened its first restaurant in Bangkok, Thailand, aiming to expand into Asia, despite the company’s financial difficulties.
The new restaurant can accommodate up to 70 people and is located in the Queen Sirikit National Convention Center in the Thai capital, Bangkok post office reported. According to the company, the new restaurant’s menu will include seafood purchased from traceable and sustainable sources, including Maine lobster, North American snow crab, wild cod, shrimp, scallops, clams and Atlantic salmon. Its signature dishes include live Maine lobster, which is served whole and cooked, and a signature feast, which combines several of its most popular dishes on one platter.
Red Lobster operates 719 locations in 44 US states and 12 countries, and generated estimated revenue of $2.5 billion (€2.61 billion) in 2019. The chain is part-owned by the produce giant of the sea based in Bangkok, Thai Union.
As of September 2020, Red Lobster operates approximately 20 restaurants in Asia, half of which are located in Japan and the remainder in Malaysia, China, the Philippines and Guam. The chain aims to grow that number to more than 100 restaurants over the next five years, Campaign flagged in September 2020, citing information provided by Thai Union COO Joerg Ayrle.
However, Red Lobster has weighed on Thai Union’s earnings since its purchase, and credit rating agency Moody’s downgraded Red Lobster to “poor quality and high credit risk” and gave it a negative rating outlook in June. 2021. Moody’s Investors Service Vice President and Chief Credit Officer William Fahy told SeafoodSource at the time that Red Lobster’s outlook was poor due to the impacts of the COVID-19 pandemic on the restaurant industry.
In August 2020, Red Lobster engaged professional financial debt advisory firms Guggenheim Partners and PPJ Solomon to help it “find good ways” to refinance its loans, Ayrle said at the time.
Red Lobster’s problems aren’t just financial. The company is currently without a CEO after Kelli Valade resigned in April 2022, after just eight months in the role. John Gordon, Founding Director of Pacific Management Consulting Group told the Orlando Sentinel in April 2022, Valade’s early start was “very, very, very bad”.
“No CEO anywhere wants to be on board a company for just eight months. That says it all. It’s an indicator of severe stress and dysfunction that you can only stay on the job for eight months before you ‘some kind of irreparable rupture from happening,’ Gordon said. [move] sends an icy chill through the leadership ranks.
In August, Thai Union pledged to guarantee up to $65 million (€68 million) of Red Lobster’s credit facility outstanding.
Thai Union’s losses on Red Lobster in the second quarter of 2022 amounted to THB 383 million (USD 10 million, EUR 10.5 million), including an operating loss of THB 281 million (USD 7.4 million, 7, EUR 7 million) and THB 102 million (USD 2.7 million, €2.8 million) loss related to accounting adjustment of leases. This loss was higher than the THB162 million ($4.2 million, €4.4 million) loss it had recorded in the second quarter of 2021, Thai Union said in August 2022.
Image courtesy of Red Lobster Thailand/Facebook