Red Lobster Considers Closing More Restaurants After Bankruptcy

CEO says brand is 'very damaged' and needs more work to repair

Published on Feb. 20, 2026

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Red Lobster is considering closing more of its restaurant locations as it continues to reevaluate its footprint following its 2024 bankruptcy. The seafood chain shuttered around 130 restaurants during the bankruptcy process, and CEO Damola Adamolekun says the company is still reviewing its locations and leases to find ways to cut costs. While sales are up about 10% from last year, they haven't recovered to pre-bankruptcy levels, and many locations need upgrades.

Why it matters

Red Lobster's struggles highlight the challenges facing casual dining chains as they navigate the fallout from the COVID-19 pandemic and changing consumer preferences. The company's decision to sell off its real estate in 2014 has also made it difficult to close underperforming locations, as many leases are tied to higher-performing restaurants.

The details

Red Lobster filed for bankruptcy in May 2024 after racking up steep losses due to reduced sales and losses from an 'endless shrimp' deal that was originally priced at $20. The company is also dealing with the impact of higher seafood costs due to tariffs. Adamolekun, who was hired as CEO after the bankruptcy, says the company has cut about 10% of its corporate staff in recent months and is negotiating with seafood vendors to manage costs.

  • Red Lobster filed for bankruptcy in May 2024.
  • Adamolekun was hired as CEO in August 2024 after leading a restructuring effort at P.F. Chang's.

The players

Damola Adamolekun

The CEO of Red Lobster, hired in August 2024 to lead the company's restructuring efforts after its bankruptcy.

Red Lobster

A seafood restaurant chain that filed for bankruptcy in 2024 and is now considering closing more locations as it works to repair its 'very damaged' brand.

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What they’re saying

“There's a lot of positive signs, but we inherited a very damaged brand, so there's still work to do to repair all of that.”

— Damola Adamolekun, CEO, Red Lobster (The Wall Street Journal)

What’s next

Red Lobster is negotiating with seafood vendors to manage the impact of higher costs due to tariffs, and the company is considering franchise deals for international locations as well as selling more Red Lobster-branded products through retail channels.

The takeaway

Red Lobster's struggles highlight the challenges facing casual dining chains as they navigate the fallout from the pandemic and changing consumer preferences. The company's decision to sell off its real estate has made it difficult to close underperforming locations, and it will need to continue to find ways to cut costs and repair its 'very damaged' brand in order to return to profitability.