Red Lobster's Bankruptcy Is INSANE
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- Опубликовано: 6 июл 2024
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In 2022, Thai Union started firing some of Red Lobster’s long-standing managers, and installed their own executives, including Paul Kenny as CEO who then ended Red Lobster’s relationship with 2 of its shrimp suppliers, leaving Red Lobster to buy all of its shrimp from a single company, yep you guessed it, Thai Union.
Just a few months later, in May 2023, Kenny launches the $20 endless shrimp promotion, ignoring warnings from other executives, he made it a permanent item on the menu. In the 3 months that followed, Red Lobster cash balance fell by $31 Million and it only got worse.
On May 19th, 2024, less than a year after the All-you-can-eat promotion was launched, Red Lobster filed chapter 11 bankruptcy.
Now I’m not usually one for conspiracy theories but the possibility that a global seafood supplier used a bottomless shrimp promotion to squeeze money out of a dying company, really peaked my interest, and what I found looking into this, shocked me.
TIMESTAMPS
INTRO 0:00
American Restaurant Staple 1:58
Sold Down The River 3:37
Shrimp Conspiracy 5:13
The Villain of the Story 7:09
Dodgy Deals 10:42
But Wait, There's More 12:57
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Red Lobster actually owned the land beneath its restaurants. When that was sold then leased, it was clear to anyone paying attenton that the primary interests were cashing out. The endless shrimp scam was just kicking a dead body.
I guess Thai Union wasn't
Why would the fact that they owned the land be an indication of them trying to cash out lol? McDonald's operates the same way....should we be anticipating their purposeful collapse
Ray Crock said he was not in the burger business, he said he was in the real estate business owning the land the McDonalds restaurants were located on.
This was the fourth time this group utilized this company to do a lease-back which favored that company, I can only assume they were in on this scheme together. It's a common play to sell off the more valuable real estate and assets and liquidate the company.
@@dr.z3426 The Chain was already on life support. Selling the land was a liquidation. McDonlad's isn't failing, Charlie Munger.
Before the shrimp 🍤 they tried to blame the “bottomless bucket of crab legs” promo for the losses. 🦀
Not surprised when hedge fund gets involved that eventually the business will be in trouble as it saddles it up with expenses (leaseback) and/or debt.
You mean private equity firm. It’s different.
That’s usually private equity. Hedgies do other stuff
Nah I blame the private equity group that cash out and sold the land😡😡😡. Not the shrimp company
I thought the group owned both.
Yes, they were likely in cahoots. The real estate was where the true value was and the shrimp was just a minor cash grab in poor, ahem taste.
In the bankruptcy they included the name change to Dead Lobster
So much seafood being consumed at once is deadly. The amount of mercury alone is enough to make the consumer a mad hatter.
Believe it or not, from what has been found in archaeological digs, although it's true mercury is found in sea food, the relative level of mercury in today's sea food is not that much higher than the historical levels going back hundreds of years. And back then, some coastal populations were VERY dependent on sea food. We are more aware of the mercury in sea food today because we now have the ability to detect and measure it. Hundreds of years ago there was no way to measure such things. Although "healthy" foods are all the rage, the fact is, you, me, and everyone else is going to die, and there is no evidence that avoiding red meat, large amounts of sea food, refined sugar, white bread, and all of the other "non-healthy" foods significantly extents one's life. The largest factor in raising the Life Expediency in modern society has been overcoming childhood deaths with vaccinations and the availability of anti-bionics. Even two or three hundred years ago, people who managed to survive into adulthood tended to live into their 60s or more. And most of what those people ate would be considered "deadly" by today's health conscious food consumers.
@@oldgysgt Refined sugar is a completely new diet staple and in no way has our bodies adapted to it, nor are they likely to.
@@seandelaney1700; "refined" sugar simply has the impurities removed, and is then granulated. It's NOT chemically changed in any way. So if you like your sugar to be brown, with small buts of foreign matter, (including insect parts), in it, go for it, but that kind of sugar is no more healthy than clean sugar.
William Dardon built a chain of restaurants through hard work and innovation. Leave it to a mega corporation to dismantle the company and milk it dry. All those people that lost their jobs...
Everything I read said it was failing when he was still the owner. Due to them not reinvesting into it.
Then he was under pressure to sell it due to it having issues.
The new company basically just milked what was left. I mean why else would they sell the land which is insane.
The writing was on the wall.
I expect they are just the first as people have to start cutting costs. There are about 30 restaurants for every grocery store and they are all way too expensive for what people have now.
I just dined at Red Lobster, a few days ago, because I wanted to use a $100. gift card, before they closed any more of
their locations! Even before their recent bankruptcy, I considered their food overpriced & had too many fried, menu items!
Our bill, for a party of four, was $100.93 plus a $20. tip, which I consider a heck of a lot of money for one step above a
"Fast Food " restaurant!
I wonder how the oil saturated nature of menu was affected by modern taste and health goals. Rich biscuits, butter and fried would keep me from going.
@@seandelaney1700 70%+ of people are overweight or obese. "modern taste and health goals" sure didnt stop anybody.
Why do you write sentences
like
this? It's incredibly jarring
and
makes it look like you dont know how
to
use a computer!
25 dollars per person at Red lobster is a good deal. You could spend almost that much at Wendy's.
Wait, so a company bought another company to make money even though it would destroy the secondary company? that kind of stuff happens all the time especially in big tech. They buy up rivals and drown them on purpose. So what’s the investigation exactly?
When I went for a trip to the US i did got that endless shrimp offer!!! It was great and it had me wondering how they were making money out of it! It’s clear now
glad. after spending 40 on lobster pasta. came with about 3 pounds of pasta with a few small shriveled up pieces of what they called lobater
NOT real lobster. DNA tests, going back to 2016, have proven that their "lobster" is actually a species of hermit crab. Half of the menu is mislabeled fakery.
Corporate sabotage bud light had the same problem
Endless shrimp has very little to do with the actual reasons why this situation happened. This mostly happened because of the land lease shenanigans of the managing company.
U R Right! It was a conspiracy to end Red Lobster!
Frozen seafood restaurant and 18 yr old cooks all for high prices.
Most intelligent elaboration
Awesome 👏🏻 video. New here, subscribed
Thank you very much for posting this video
Well put Hamish !
Dine and dash…. Is now start a fight and we all eat free. I don’t believe it.
It’s like believing that squatters have more rights than the owner.
I saw the headlines regarding all you can eat shrimp throwing them under and knew it made no sense. Thanks for explaining this company was plundered for it's real estate holdings and went out with a quick cash grab of overpriced, over promoted shrimp. Great reporting.
Look into Steward Healthcare - Exact same thing just with hospitals
I’ve never gone to one. Always wished I could go to steak houses and Olive Gardens and red lobster sort of places as a kid. Growing up before tik toc the commercials made them seem like they were good quality food.
They’re not.
It’s literal garbage
Red Lobster is no different than McDonalds. Their food sucks. It used to be good. You be better off getting a box of fishsticks from the store
The real reason red lobster fail is "hedgefunds".
Hedgefunds are killing the economy. Their grubby hands are into every resource including land and water.
This was called a 'bustout' in the Sopranos.
Did they make more off the endless shrimp supply scheme to offset the company’s value plummeting? It would have to be worth it for them to make a profit in the long run.
Hamish, really liked this style of story concentrating on the odd history of a well known brand. Would be cool to see more of these types in addition to your videos about macro economic conditions and strategy.
how did this weaken the 2 suppliers, did Thai union buy stake in any part of them?
They cut them off from being suppliers and Thai Union raised prices.
Pretty sad after a founder dies, and the company is sold off to other interests. OTOH, I think you can replace most of these chain restaurants (and fast food companies) with something healthier from an air fryer…!
Their food has been less than mediocre. People can get much better elsewhere. That's a major issue they won't talk about.
They had to operate it as a buffet at that point.
Time limits, and say a max of 5 refills
They wanted them to eat too much of the owners shrimp, that was the entire point of the lawsuit and video.
If they had bought their shrimp from the Bubba Gump S
eafood Company they would be fine now
Lambert did the same to Kmart, sell the property and lease it back.
I buy RedLobster at the Grocery store. WHo is getting that money?
These aren't business people. They are scavengers.
A certain group of people will be upset next April.
Why dod Thai Union get involved?
if you like this, check out Mark Tritton and Bed Bath and Beyond. Same play book, but currently being exposed by Ryan Cohen and crew.
Current plan admin filed suit against executives that played a major role in the company having to file for chapter 11.
Also CFO Gustavo Arnal passed away("jumped from Jenga building in NYC) shortly after selling his entire position during the runup to $30 in August 2022. Alot of red flags here. Definitely worth digging into, there's an entire community willing to contribute data from the past 2- years of peer shared info regarding inconsistencies across the board ranging from buybacks, & questionable inventory purchases amongst other nefarious actions.
@@Pano_CheezY this guy gets it. With all respects to the CFO's family, there is some speculation he may found alive somewhere ...
Interesting, but I doubt this is the whole story. The shrimp supply side was making money and red lobster was a tax Wright-off. Still Red lobster may go the way of the dinosaur.
Damn , how many different companies and people can screw red lobster over for their own personal and financial gain , talk about greed .
Eye problem?
The bankruptcy should be denied
Why? Bail them out like the banks?
Only poor people get denied bankruptcy
Red lobster owners fast buck tricks set the stage for downfall but death was brought on by quality cuts in the food nobody was supposed to notice. Every restaurant, independent or chain, I've seen cut food quality died and did so quickly. Sad.
Did Thai used red lobster to dump overproduced shrimps?
I have no idea how these restaurants existed for so long. I literally have eaten red lobster 3 times in my life at most. So if everyone goes 3-5 times in their life, Red Lobster shouldn't have existed for decades.
But half of their customers are those who would never go to fast food so half their customer base was only people who eat at places like this.
Thai Union was sold a dying company that had been asset stripped and left to bleed out!
They tried everything they could to turn it around, but the damage was already done.
The debt in the form of over-priced leases and other debt was simply a slow Death Sentence.
First of all Red Lobster NEVER had quality seafood-it was always frozen and the cheapest stuff they could buy (a lot like Starbucks); second: they had been going downhill for years-I ate there twice-and would never go back. They had no chefs..everything looked (and tasted) like it was heated in a microwave, As others have pointed out, it was for people who didn't know good from bad seafood. As for the private equity scam-these firms seek out companies in distress-with lots of hidden assets that they can steal; the MO is always the same (pioneered by crooks like T Boon Pickens): liquidate all the assets and steal the money, load the firm up with debt, and have another IPO-and let the new investors get caught holding an empty bag. Unfortunately-in these "bustouts" a lot of good people lose their jobs..but as long as we have people like Joe Biden and Adam Schiff-nobdy in DC aill bat an eyelash. Many of them are owned by hedge funds. So the pluder continues-this will only stop when Trump cleans house..and the deep state won't allow that.
Didn't he pull the same thing with his Atlantic city casino and hotel.
You basically have it right, including Trump won't change anything, nor does he want to.
Why entire world always get play by Monoply's game? Just limit Housing buying from Company and shit!
We know what killed Red Lobster
They use imitation lobster. Even supermarkets sell this garbage
Lots of things weird about this story. Worthy of reporting? Worthy of viewing? Sure.
People get sick after eating food at “Red Lobster ” . I only went there once and the food almost killed me.
Goofy.