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Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

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Red Lobster seeks bankruptcy
Red Lobster seeks bankruptcy | AP

With innovations like popcorn shrimp and “endless” seafood offers, Red Lobster, the casual dining restaurant that popularized seafood, has filed for Chapter 11 bankruptcy protection.

The 56-year-old chain filed late on Sunday following the closure of numerous locations.

“Red Lobster’s best course of action in the future is this restructure. CEO Jonathan Tibus stated, “It enables us to overcome multiple operational and financial obstacles and come out stronger and refocused on our growth.” Expert in corporate reorganization, Tibus assumed the company’s senior position in March.

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | Pixa Bay Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

Red Lobster announced that its restaurants will stay open during the bankruptcy process, which aims to streamline operations, close locations, and explore a sale. As part of the filing, Red Lobster entered into a “stalking horse” arrangement, which means it intends to sell the company to a company created and managed by its lenders.

According to Aaron Allen, the founder of the restaurant consulting business Aaron Allen & Associates,s bankruptcy was the result of two decades of problems for the company. The company has faced rising competition from quicker-moving, less expensive restaurants like Panera and Chipotle.

Red Lobster occasionally drops its prices to compete, a frequently catastrophic strategy. When crab prices increased in 2003, the company lost millions of dollars on an all-you-can-eat “Endless Crab” campaign, according to Allen. Twenty years later, the chain repeated the same strategy with an “Ultimate Endless Shrimp” campaign.

“It’s an interesting case study in corporate food service that they would have this kind of corporate amnesia,” Allen remarked.

He claimed it saw greater success after Red Lobster rebranded itself as an upscale eatery in the middle of the 2000s. It remodeled stores and increased pricing. However, it continued to face challenges from shifting consumer preferences and growing labor and leasing expenses.

Allen stated, “This slow-moving train wreck has been in motion for the past 20 years.”

Based in Orlando, Florida, Bill Darden started the resturant to lower costs and increase the accessibility of seafood restaurants for families.

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | AP Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

In 1938, Darden launched The Green Frog in Waycross, Georgia, marking his entry into the restaurant industry. Even though it was against the law then, he dared not separate the restaurant’s guests based on race. Again, he let patrons seat wherever they pleased when he launched the first location in Orlando in 1968.

In 1970, Darden sold it to General Mills, where he remained an executive and continued to operate restaurants. Afterward, General Mills founded Darden Restaurants, which owns Olive Garden and several other brands. In 1995, Darden Restaurants separated from General Mills.

Red Lobster attracted hordes of devotees for meals like lobster linguini and its buttery Cheddar Bay biscuits

Nobody who was born in the world could not enjoy Red Lobster cheddar biscuits. In her memoir “Bossypants,” comedian and actress Tina Fey stated, “Anyone who claims otherwise is a liar and a socialist.”

However, the restaurant needed help to attract younger patrons and stay competitive with other eateries. In 2014, Darden Restaurants sold to a private equity firm. One of the biggest seafood suppliers in the world, Thai Union Group, made its initial investment in Red Lobster in 2016 and increased it again in 2020.

Then, during its “Ultimate Endless Shrimp” promotion last fall, they lost millions of dollars by charging $20 for an all-you-can-eat shrimp feast.

In an earnings call with investors, Thai Union Group’s chief financial officer, Ludovic Garnier, stated, “We knew the price was cheap, but the idea was to bring more traffic in the restaurants.

Garnier reported that restaurant traffic increased as a result of the transaction. However, more customers than Red Lobster had anticipated chose the $20 offer, and “we don’t earn a lot of money at $20,” he said. Thai Union Group reported a $19 million loss from Red Lobster for the first nine months of 2023.

Thai Union Group declared in January that it would sell its minority stake in Red Lobster. According to CEO Thiraphong Chansiri, the COVID-19 epidemic, business challenges, and growing operating expenses have severely impacted the restaurant chain and resulted in “prolonged negative financial contributions to Thai Union and its shareholders.”

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | AP – VOR News Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

According to a statement made last week by restaurant liquidator TAGeX Brands, the equipment from more than 50 recently closed Red Lobster locations will be up for sale. As a result of the restaurant closures, which are occurring in over 20 states, Red Lobster’s footprint is being diminished in places such as Denver, San Antonio, Indianapolis, and Sacramento, California.

Allen anticipates that due to the bankruptcy proceedings, 700-restaurant network will decrease by one-third to half. All that many prospective purchasers seek is the chain’s real estate.

He predicted the buyer would likely want to keep Red Lobster the same.

In the court statement, Red Lobster stated that its assets are believed to be between $1 billion and $10 billion, with over 100,000 creditors. The corporation’s liabilities are between $1 billion and $10 billion.

SOURCE – (AP)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics. Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Sonic the Hedgehog Dominates Christmas Wish Lists

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Sonic the Hedgehog
Sonic the Hedgehog Merchandise are hot Christmas Items

Sonic the Hedgehog is dominating Christmas wish lists this year. The lovable blue hedgehog is back in the spotlight, from sonic the hedgehog toys and games to sonic the hedgehog coloring pages and movie hype.

Sonic-themed holiday merchandise is on fire, from quirky sweaters to action figures flying off shelves. Sonic the Hedgehog Christmas outfits for kids are selling out fast, making them a go-to gift option for festive fun.

Retailers have been quick to recognize Sonic’s holiday appeal. Special promotions and exclusive items, like the Sonic holiday t-shirts, are everywhere.

Everyone’s stocking up on Sonic merchandise, from big-box stores to boutique retailers.

Online shopping platforms are seeing a surge in searches for Sonic items. Whether it’s Sonic Christmas-themed tops or Sonic the Hedgehog coloring pages, Sonic the Hedgehog toys or Sonic and the Hedgehog 3, the demand is skyrocketing.

Retailers who tap into this trend are sure to see strong holiday sales.

Sonic has been around since the early 90s, but his popularity never wanes. With the release of Sonic 3, fans are more excited than ever.

sonic the hedgehog 4

Sonic the Hedgehog 4

Meanwhile, Paramount Pictures is preparing “Sonic the Hedgehog 4,” with the newest addition in the family-friendly genre set for a spring 2027 release.

The announcement comes as “Sonic 3” opens in theatres on Friday, estimated to gross $55 million to $60 million from 3,800 North American locations.

The sequel is shaping up to be a good holiday season blockbuster for Paramount, which explains the desire in future “Sonic” adventures. On the international front, the film will be released on Christmas Day in 52 markets.

On Rotten Tomatoes, critics gave “Sonic 3” an outstanding 87% fresh score.

The first two films grossed a total of $725.2 million at the global box office and generated over $180 million in global consumer expenditure through home entertainment rentals and digital purchases.

They also inspired a spinoff Paramount+ series, “Knuckles,” which premiered earlier this year.

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Amazon Strike Called By Teamsters Union 10,000 Walkout

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Amazon Strike Called By Teamsters Union
Teamsters members were demonstrating at "hundreds" of other Amazon locations.

An Amazon strike has hit facilities in the United States in an effort by the Teamsters union to pressure the corporation for a labour agreement during a peak shopping season.

The Teamsters union told the Associated Press that Amazon delivery drivers at seven facilities in the United States walked off the job on Thursday after the firm failed to discuss a labour contract.

According to the union, Amazon employees in Teamsters union jackets were protesting at “hundreds” of additional Amazon facilities, which the union billed as the “largest strike” in US history involving the company.

The corporation, which employs over 800,000 people in its US delivery network, stated that its services will be unaffected.

It was unclear how many people, including members of Germany’s United Services Union, participated in Thursday’s demonstration. The Teamsters union reported that thousands of Amazon employees were implicated in the United States.

Amazon Strike at 10 Locations

Overall, the group claims to represent “nearly 10,000” Amazon strikers, having signed up thousands of people at roughly ten locations across the country, many of whom have joined in recent months.

The organization has claimed recognition from Amazon going on strike, claiming the firm illegally neglected its obligation to bargain collectively over salary and working conditions.

The Teamsters is a long-standing US union with nearly one million members. It is well-known for securing lucrative contracts for its members at companies like delivery behemoth UPS.

Most of the Teamsters’ Amazon campaigns have concerned drivers working for third-party delivery companies that partner with the tech behemoth.

Amazon denies that it is liable as an employer in those circumstances, which is a point of legal contention. In at least one case, labour officials have taken a preliminary stance in favour of the union.

Stalled Contract Negotiations

Amazon employees at a major warehouse on Staten Island in New York have also chosen to join the Teamsters. Their warehouse is the only Amazon facility in the United States where labour officials have formally recognized a union win.

However, the Amazon strike is because contract negotiations have not progressed since the 2022 vote. It was not one of the areas scheduled to go on strike on Thursday.

Amazon, one of the largest employers in the United States, has long received criticism for its working conditions and has been the target of activists seeking to gain traction among its employees.

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Amazon Encounters Numerous Strikes As Unions Aim At The Holiday Shopping Surge.

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Amazon

(VOR News) – Thousands of Amazon employees at various sites across the country were scheduled to go on strike on Thursday in an effort by the Teamsters union to pressure the retail behemoth to acknowledge its unionised workers in the United States.

The walkout is expected to concentrate on seven Amazon locations across the country during the holiday purchasing surge and may be the most significant union action against Amazon in the nation’s history.

The business announced on Thursday morning that there had been no effect on operations. It also stated that it is “continuing to concentrate on fulfilling customers’ holiday orders.”

The International Brotherhood of Teamsters maintains that it represents more than 10,000 Amazon employees and contractors in aviation centres, warehouses, and delivery centres.

Amazon has refused to acknowledge the union for many years.

The retail giant, which employs approximately 1.5 million individuals, excludes contractors and part-timers. A strike has been initiated by delivery couriers and warehouse employees at seven distinct locations in order to exert pressure on the company to negotiate a collective bargaining agreement that would encompass modifications to compensation, amenities, and working conditions.

Picketing was intended for New York, Atlanta, Los Angeles, San Francisco, and Skokie, Illinois.

Also, the Teamsters assert that they are establishing picket lines at “hundreds” of additional warehouses and delivery centres by encouraging non-unionized workers to picket under U.S. labour law, which protects workers’ ability to take collective action to further their interests.

“Amazon workers are exercising their power,” Randy Korgan stated to NPR.

“They now realise there is a pathway to take on a corporate giant like this – and that they hold the power.” Amazon responds by accusing the Teamsters of fabricating information regarding the strikes, asserting that the participants are “entirely” outsiders rather than employees or subcontractors of the corporation.

Amazon spokesperson Kelly Nantel stated that “the reality is that they were unable to secure sufficient support from our employees and partners and have invited external parties to harass and intimidate our team.” For more than a year, the Teamsters have been intentionally misleading the public by claiming to represent “thousands of employees and drivers.” They do not.

The Teamsters did not provide a specific duration for the strike; however, they informed NPR that it would extend beyond one day. Workers would receive $1,000 per week in strike money, as per the union.

Teamsters President Sean O’Brien issued a statement in which he stated, “If your package is delayed during the holidays, you can attribute it to Amazon’s insatiable greed.” We established a firm deadline for Amazon to attend the meeting and treat our members equitably. They disregarded it.

The Teamsters granted until December 15 to convene with its unionised employees and develop a collective bargaining agreement.

Amazon has opposed all unionisation efforts in court, asserting that unions were not advantageous to its employees and emphasising the compensation and benefits that the organisation currently provides.

Amazon has been accused of discriminatory labour practices on numerous occasions, including the termination of labour organisers. Furthermore, it has disputed its official status as a contract employer.

Teamsters organize Amazon delivery couriers and other employees.

In June, Amazon established its first unionised warehouse in Staten Island, New York, two years after making history by voting to join the fledgling Amazon Labour Union, which is also affiliated with the Teamsters.

The union is one of the most influential in the United States and Canada, with 1.3 million members. On Thursday, the German United Services Union declared that Amazon employees in Germany would participate in a strike in conjunction with their American counterparts.

In the past, Amazon has experienced demonstrations in Germany and Spain that were related to the holiday season in order to advocate for improved wages and working conditions.

“The holiday season has arrived.” Delivery is anticipated. Patricia Campos-Medina, the executive director of Cornell University’s Worker Institute, asserts that “this is the moment in which workers have control over the supply chain.”

The Teamsters have reported that Amazon’s profits have increased both during and after the pandemic. The corporation is currently valued at over $2.3 trillion, with net income of $15 billion in the most recent quarter alone. It is the second-largest private employer in the United States, following Walmart.

SOURCE: NPR

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