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🟡 FORMERLY PE OWNED
Red Lobster
seafood · Orlando, FL
PE Firm
Golden Gate Capital
Year Acquired
2014
“Private equity sold the land under the restaurants, then blamed the shrimp.”
What Happened
- •Golden Gate Capital bought Red Lobster for $2.1B in 2014, then immediately sold $1.5B in real estate in a sale-leaseback — nearly recouping the entire purchase price while saddling the chain with crushing rent
- •Rent obligations ballooned to $191 million annually while sales dropped 23%, making the business structurally unprofitable
- •Filed Chapter 11 bankruptcy in May 2024 and closed roughly 130 locations — one out of every five restaurants
- •The Endless Shrimp promotion cost $11 million — a rounding error compared to the real estate strip-mining
The Damage Done
- ▸Roughly 130 locations closed after bankruptcy filing — one out of every five restaurants, gone
- ▸Remaining locations visibly deteriorated: peeling paint, broken booths, reduced menu variety
- ▸Staff cuts left many locations chronically understaffed, with longer wait times and smaller portions reported
- ▸The Endless Shrimp promotion that 'caused' the bankruptcy cost $11 million — a rounding error compared to $1.5 billion in real estate stripped out