Summary
When Thai Union Group became Red Lobster’s leading shareholder in 2020, employees were assured Thai Union would not interfere in key decisions. Those pledges didn’t last. The chain has drowned in a relentless supply of Thai Union-supplied shrimp. Red Lobsters filed for Chapter 11 bankruptcy Sunday.
Former Red Lobster employees describe a toxic and demoralizing environment. Thai Union-appointed executives descended on headquarters and interim CEO Paul Kenny eventually took over. Kenny criticized Red Lobsters employees at meetings and made derogatory comments about them. The changes pushed away customers and cut into Red Lobter’s sales.
Red Lobster re-hired 26,000 employees from January to August of 2021 and appointed Kelli Valade CEO. But Kenny, then a Red Lobster board member, soon began exercising more control over the company. Changes to restaurant operations alienated customers and staff and hurt sales.
Last summer, Red Lobster turned $20 “Ultimate Endless Shrimp” into a permanent menu item. Thai Union was the direct competitor of these other seafood suppliers, and suddenly had intimate access to their products, prices and strategy. Red Lobsters lost $11 million following the deal, its bankruptcy filing states.
