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Purple Lobster stated it would use the chapter proceedings to simplify its operations, shut eating places, and pursue a sale.
By MICHELLE CHAPMAN and DEE-ANN DURBIN, Related Press
Purple Lobster, the informal eating chain that received followers with innovations like popcorn shrimp and “limitless” seafood offers, has filed for Chapter 11 chapter safety.
The 56-year-old chain made the submitting late Sunday, days after shuttering dozens of eating places.
“This restructuring is one of the best path ahead for Purple Lobster. It permits us to handle a number of monetary and operational challenges and emerge stronger and re-focused on our progress,” stated Purple Lobster CEO Jonathan Tibus, a company restructuring professional who took the highest put up on the chain in March.
Purple Lobster stated it would use the chapter proceedings to simplify its operations, shut eating places and pursue a sale. As a part of the filings, Purple Lobster has entered right into a so-called “stalking horse” settlement, which means it plans to promote its enterprise to an entity shaped and managed by its lenders.
The Orlando, Florida-based chain was based by Invoice Darden, who wished to make seafood eating places extra accessible and inexpensive for households. Darden bought Purple Lobster to Normal Mills in 1970. Normal Mills later went on to kind Darden Eating places, which owns Olive Backyard and different chains, and spun the corporate off in 1995.
Lately, Purple Lobster has been battling growing competitors from quick informal chains like Chipotle in addition to rising lease and labor prices. Its all-you-can eat offers for shrimp and lobster additionally turned more and more costly.
Final fall, Purple Lobster misplaced tens of millions of {dollars} on its Final Countless Shrimp promotion, which charged $20 for all-you-can-eat shrimp deal.
“We knew the value was low cost, however the thought was to convey extra site visitors within the eating places,” Ludovic Garnier, the chief monetary officer of Thai Union Group, Purple Lobster’s former co-owner, stated in an earnings name with buyers.
Garnier stated the deal did work, and restaurant site visitors elevated. However extra company opted for the $20 deal than Purple Lobster anticipated, Garnier stated, including “we don’t earn some huge cash at $20.” For the primary 9 months of 2023, Thai Union Group — which is likely one of the world’s largest seafood suppliers — reported a $19 million share of loss from Purple Lobster.
In January, Thai Union Group introduced its intention to exit its minority funding in Purple Lobster. CEO Thiraphong Chansiri stated the COVID-19 pandemic, trade headwinds and rising working prices had hit the eating chain arduous and brought about “extended adverse monetary contributions to Thai Union and its shareholders.”
Thai Union Group first invested in Purple Lobster in 2016 and upped its stake in 2020.
Restaurant liquidator TAGeX Manufacturers introduced final week that it might be auctioning off the tools of over 50 Purple Lobster places that have been not too long ago closed. The shop closures span throughout greater than 20 states — lowering Purple Lobster’s presence in cities like Denver, San Antonio, Indianapolis and Sacramento, California.
The seafood restaurant chain stated in a court docket submitting that it has greater than 100,000 collectors and estimated belongings between $1 billion and $10 billion. The corporate’s estimated liabilities are between $1 billion and $10 billion.
Purple Lobster operates 700 places worldwide.
