U.S. restaurant chain Red Lobster has opened its first location in Bangkok, Thailand in a bid to expand into Asia, despite the company’s financial difficulties.
The new restaurant can hold up to 70 guests and is located in Queen Sirikit National Convention Center in the Thai capital, the Bangkok Post reported. According to the company, the new restaurant's menu will feature seafood purchased from traceable and sustainable sources, including Maine lobster, North American snow crab, wild-caught cod, shrimp, scallops, clams, and Atlantic salmon. Its signature dishes comprise live Maine lobster, which is served whole and cooked, and a Signature Feast, which combines several of its most-popular items on one platter.
Red Lobster operates 719 locations in 44 U.S. states and 12 countries, and generated an estimated USD 2.5 billion (EUR 2.61 billion) in revenue in 2019. The chain is partially owned by Bangkok-based seafood giant Thai Union.
As of September 2020, Red Lobster operated about 20 restaurants in Asia, half of which are located in Japan with the rest in Malaysia, China, the Philippines, and Guam. The chain aims to raise that number to more than 100 restaurants in the next five years, Campaign reported in September 2020, citing information provided by Thai Union COO Joerg Ayrle.
However, Red Lobster has been a drag on Thai Union’s profits since its purchase, and credit ratings agency Moody’s downgraded Red Lobster to “poor quality and high credit risk” and gave it a negative ratings outlook in June 2021. Moody’s Investors Service Vice President and Senior 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 foodservice sector.
In August 2020, Red Lobster engaged professional financial debt advisory firms Guggenheim Partners and PPJ Solomon to help “find good ways” to refinance its loans, Ayrle said at the time.
Red Lobster’s problems are more than just financial. The company is currently without a CEO after Kelli Valade resigned in April 2022, after only eight months in the role. Pacific Management Consulting Group Founding Principal John Gordon told the Orlando Sentinel in April 2022 Valade’s swift departure was “very, very, very bad.”
“No CEO anywhere wants to be on board a company only eight months. That says it all. That is an indicator of severe stress and malfunction that you can only stay on a job eight months before some sort of irreparable break occurs,” Gordon said. “This kind of [move] causes a shiver of ice to go through the management ranks.”
In August, Thai Union promised to guarantee as much as USD 65 million (EUR 68 million) of the outstanding credit facility balance of Red Lobster.
Thai Union’s losses from Red Lobster in Q2 2022 rose to THB 383 million (USD 10 million, EUR 10.5 million), including a THB 281 million (USD 7.4 million, EUR 7.7 million) loss from operations and THB 102 million (USD 2.7 million, EUR 2.8 million) loss from lease accounting adjustment. That loss was bigger than the THB 162 million (USD 4.2 million, EUR 4.4 million) loss it posted in the Q2 2021, Thai Union said in August 2022.
Image courtesy of Red Lobster Thailand/Facebook
