Bankrupt seafood chain Red Lobster tapped former P.F. Chang’s CEO Damola Adamolekun to take over the floundering company – and announced it will shutter an additional 23 locations by the end of the week, according to a court filing Monday.
Red Lobster – which blamed a $20 all-you-can-eat shrimp promotion for a big chunk of its financial mess before filing for Chapter 11 protection in May – is awaiting court approval for a purchase by new lenders led by investment management firm Fortress.
Fortress, co-founded by billionaire Milwaukee Bucks co-owner Wesley Eden, will create RL Investor Holdings, a newly formed entity, to acquire Red Lobster out of bankruptcy.
The firm said Adamolekun, who stepped down from his role as the boss of P.F. Chang’s in 2023, will become the CEO of RL Investor pending the completion of the sale, which is set for next month.
“I’m looking forward to working with our team members across North America to reinvigorate the brand by making it the best place to work for our employees and improving the experience for our guests,” Adamolekun, 35, said in a statement.
Orlando, Fla.-based Red Lobster, which suddenly shuttered more than 100 restaurants before filing for bankruptcy, would continue to operate as an independent company, with 544 locations across 44 states and four Canadian provinces, Fortress said.
The casual-dining chain, founded in 1968, has been struggling to stay afloat as consumers have pulled back on spending while sticky inflation has kept prices high.
Thai Union Group – a Thailand-based seafood supplier – became Red Lobster’s largest shareholder in 2020.
Though the conglomerate pledged to stay out of Red Lobster’s day-to-day operations, Thai Union representatives took on top roles at the company’s headquarters and became enmeshed in the restaurant business.
It reportedly created a toxic work environment with high turnover, according to a CNN report.
The company had five CEOs in five years under Thai Union.
The seafood group divested itself of the stake after Red Lobster’s colossal losses earlier this year.
Thai Union did not immediately respond to requests for comment.
Fortress Investment Group, a $48 billion private equity firm, has bought other companies out of bankruptcy, including Krystal Restaurants and Logan’s Roadhouse
Adamolekun served as CEO of P.F. Chang’s from 2020 to 2023. He sat on the company’s board before taking on an executive role.
The Asian fusion chain reported US sales of $994.3 million last year under Adamolekun’s leadership – down slightly from the year before, but an increase from pre-pandemic levels, according to market research firm Technomic.
Adamolekun has been credited with helping P.F. Chang’s take advantage of to-go service and expanding its locations across the country.
