Red Lobster files for bankruptcy but will stay open

The popular chain has filed for Chapter 11 bankruptcy.

Transcript

00:00 I'm Conway Gittins reporting from the New York Stock Exchange. Here's what we're watching on

00:03 the street today. Stocks are looking to continue a four-week rally after the Dow closed above the

00:09 key 40,000 level for the first time. Investors are looking ahead to earnings from Target and

00:14 Nvidia as well as minutes from the Federal Reserve's May meeting. Markets are pricing

00:18 in a 74 percent chance the central bank cuts interest rates by September. In other news,

00:25 the world's largest seafood restaurant chain is filing for bankruptcy. Red Lobster announced the

00:30 move after it revealed it had more than a billion dollars in debt and less than 30 million dollars

00:35 in cash on hand. The company plans to sell the business to its lenders which will allow it to

00:40 receive financing and remain open. However, it does expect to have to close several restaurants.

00:47 Red Lobster was founded in 1968 and according to its bankruptcy filing now has 578 locations

00:53 across the U.S. and Canada and serves 64 million customers a year. 20 percent of all lobster tails

01:00 purchased in North America are bought by the chain. But Red Lobster has struggled over the

01:05 years due to poor management, inflation and increased competition. It has lost 30 percent

01:11 of its customers since 2019 and its largest shareholder Thai Union divested from the company

01:17 taking a 530 million dollar loss. As part of its bankruptcy plan, Red Lobster said it will receive

01:23 a 100 million dollar financing agreement to help keep restaurants running. That'll do it for your

01:29 daily briefing from the New York Stock Exchange. I'm Conway Gittins with the Street.

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