What went wrong at Red Lobster

The following year, Darden sold Red Lobster to Golden Gate Capital, a private equity firm, for $2.1 billion. To help fund the deal, Red Lobster spun off its real estate assets in a transaction known as a sale leaseback agreement. Red Lobster had long owned its own real estate but would now be paying rent to lease its restaurants.

Sale leasebacks are very common in the restaurant industry, but the arrangement wound up hurting Red Lobster because it became stuck with leases it no longer could afford to pay.

“That produced cost pressures on Red Lobster that they’ve never had before,” said analyst John Gordon. “It became a problem.”

I'm sorry, how the fk is this legal?

It's wild that the headline has been 'Red Lobster gave away too much food' when ya know every single property suddenly went from not having to pay rent to paying fking rent. Seems like a more likely issue!

More on this here.

And then:

Thai Union was a top supplier of shrimp to Red Lobster for more than 20 years. In 2016, Thai Union took a $575 million minority stake in the brand. In 2020, Thai Union deepened its financial interest in Red Lobster.

Thai Union saw an opportunity to grow its business and also become a bigger supplier to Red Lobster.

But Thai Union “didn’t have any idea about running a restaurant company in the United States,” said former Red Lobster divisional vice president Les Foreman.

Seems like actively screwing with the supply chain for the restaurants would also be a major problem!

Or how about like

The menu decisions were driven by “executive opinion,” not customer preferences, the former executive said.

It also tested squeezing Red Lobster’s waitstaff to the breaking point to save on labor costs, switching from waiters covering three tables to 10.

It sure seems like the endless shrimp wasn't the actual problem!