Red Lobster has had a fishy few months. In May, the seafood chain filed for bankruptcy after more than 50 locations closed amid massive losses from its mayhem-making Endless Shrimp promotion.
But in August, Red Lobster reeled in a new CEO: Damola Adamolekun, the 35-year-old former P.F. Chang’s chief executive. Adamolekun is on a mission to revive the embroiled 56-year-old restaurant chain after it was rocked by crustacean chaos in the past couple of years.
“This is, without exaggeration, one of the most important companies in American history,” Adamolekun told CNN. “There were certainly big mistakes made over the last few years.”
One of the major missteps Adamolekun was referring to: Red Lobster’s endless shrimp promotion. It was wildly popular with guests, but it was entirely too costly for the restaurant chain—which suffered millions in operating losses—and put undue stress on servers and kitchen staff, Adamolekun said.
Shrimp is a “very expensive product to give away endlessly,” he said in the CNN interview. “When you have endless shrimp, and people are coming in and sitting down at the table and eating for hours as much shrimp as they possibly can, you stress out the kitchen. You stress out the servers. You stress out the host. People can’t get a table. It creates a lot of chaos.”
The Ultimate Endless Shrimp deal launched in June 2023, and diners could choose from two types of unlimited shrimp dishes for $20. The deal, which halted in late 2023, also included the chain’s famous Cheddar Bay Biscuits. It had previously been a limited-time deal, but the restaurant’s attempt to make it a standing menu option ultimately factored into the company’s downfall. It resulted in an $11 million loss, and the restructuring team blamed it as a direct contributor to its May bankruptcy filing.
“We wanted to boost our traffic, and it didn’t work,” Thai Union Group chief financial officer Ludovic Regis Henri Garnier told investors. “We need to be much more careful regarding what are the entry points and what is the price point we are offering for this promotion.” Thai Union Group is Red Lobster’s Thailand-based investor; it expects to fully divest by the end of the year.
Thiraphong Chansiri, Thai Union Group’s CEO, however, pointed to other factors beleaguering the seafood chain.
“The combination of COVID-19 pandemic, sustained industry headwinds, higher interest rates, and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders,” Chansiri said in a statement in January.
The CEO’s vision for Red Lobster
While dozens of Red Lobster locations closed in 2023, Adamolekun told CNN his plan is to grow the company—but not necessarily by opening or reopening locations.
“We intend to be done closing restaurants,” he told CNN. “We intend to grow from here in terms of the business. There’s going to be investments in the product that will take time. Infrastructure investment takes time. Technology investment takes time.”
There are currently 545 Red Lobster locations, and Adamolekun said the company intends to improve each of them by fixing broken HVAC systems, torn carpets, and chairs.
“It will take time, but the impact should be felt right away,” he said. Adamolekun also said the company plans to slim down its menu in a “very intelligent way” because the offerings were too plentiful.
Adamolekun got a head start on his vision for the restaurant by secretly visiting restaurants around the country before taking the company’s top job and snacking on crab legs and lobster tail. He did this as a means to connect with and understand the brand—and its customers.
Customers “just want quality food in a comfortable setting and to connect with the history of the brand,” he told WSJ. “That’s the first step.”
This story was originally featured on Fortune.com
