Red Lobster has had a few fishing months. In May, the seafood chain filed for bankruptcy after more than 50 locations closed due to massive losses from the chaos-causing Endless Shrimp promotion.
But in August, Red Lobster brought in a new CEO: Damola Adamolekun, the 35-year-old former CEO of PF Chang. Adamolekun is on a mission to revive the embattled 56-year-old restaurant chain after it was rocked by the shellfish chaos in recent years.
“This is, without exaggeration, one of the most important companies in American history,” Adamolekun told CNN. “There have certainly been big mistakes made in recent years.”
One of the biggest missteps Adamolekun talked about: Red Lobster’s endless shrimp promotion. It was wildly popular with diners, but it was too expensive for the restaurant chain — which suffered millions in operating losses — and put unnecessary strain 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 amounts of shrimp, and people come in and sit at the table and eat as many shrimp as they can for hours, you start to get stressed in the kitchen. You’re stressing the servers. You’re stressing out the host. People can’t get a table. It causes a lot of chaos.”
The Ultimate Endless Shrimp deal launched in June 2023, and guests could choose from two types of unlimited shrimp dishes for $20. The deal, which was discontinued at the end of 2023, also included the chain’s famous Cheddar Bay Biscuits. It was previously a temporary deal, but the restaurant’s attempt to make it a permanent menu ultimately contributed to the company’s demise. It resulted in an $11 million loss, and the restructuring team accused it of directly contributing to the bankruptcy filing in May.
“We wanted to increase our traffic, but that didn’t work,” Ludovic Regis Henri Garnier, chief financial officer of Thai Union Group, told investors.. “We have to be a lot more careful about what the entry points are and what the price point is that we offer for this promotion.” Thai Union Group is Red Lobster’s Thailand-based investor; It expects to divest completely by the end of the year.
However, Thai Union Group CEO Thiraphong Chansiri pointed to other factors plaguing the seafood chain.
“The combination of the COVID-19 pandemic, ongoing industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in long-term 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 business, but not necessarily by opening or reopening locations.
“We plan to be done closing restaurants,” he told CNN. “From here we want to grow further in terms of business. There will be investments in the product that will take time. Investments in infrastructure take time. Investments in technology take time.”
There are currently 545 Red Lobster locations, and Adamolekun said the company plans to improve all of them by repairing broken HVAC systems, torn carpets and seating.
“It will take time, but the impact should be felt immediately,” he said. Adamolekun also said the company plans to slim down its menu in a “very intelligent way” because the offering was too plentiful.
Adamolekun got a head start on his vision for the restaurant by secretly visiting restaurants across the country before taking the company’s top job and feasting on crab legs and lobster tail. He did this as a way to connect and understand the brand and its customers.
Customers “just want quality food in a comfortable environment and to connect with the brand’s history,” he said WJ. “That’s the first step.”
This story originally appeared on Fortune.com
