Red Lobster abruptly closes 2 restaurants in Illinois

Two Red Lobster restaurants in Illinois are among dozens across the nation to abruptly close their doors amid reports that the popular seafood chain might soon file for bankruptcy.

The restaurants were closed in Bloomingdale and Danville, according to the company’s website.

Restaurants in Wauwatosa, Wisconsin, Indianapolis and Elkhart, Indiana were also shuttered. They are among at least 48 locations in more than 20 states to suddenly shut down operations. Click here for a state-by-state list of the closures, according to TAGeX Brands.

In Bloomingdale, a ‘Notice of Voluntary Closure’ with Tuesday’s date – issued by the DuPage County Health Department – was posted to the restaurant’s entrance.

With no notice, the closure came as a shock to customers.

"It’s a real shame," said Debbie Styka, customer. "It was a favorite for special occasions too."

Located in the 300 block of West Army Trail Road in Bloomingdale, customers like Casey Morrissette – craving seafood and Cheddar Bay Biscuits – were met with disappointment Tuesday. 

"You make ‘em at home, they still don’t taste the same," said Morrissette in reference to the restaurant’s beloved biscuits. "I was looking for a decent meal, usually Red Lobster offers a budget-friendly meal, and I was looking for some good fish."

Restaurant liquidation company TAGeX Brands announced it would be overseeing the restaurant closures. It is calling the liquidation its "largest restaurant equipment auction ever."

On Tuesday, only 48 locations were listed in its auction catalog, but the company stated it will be auctioning off equipment from more than 50 Red Lobster restaurants.  

TAGeX also said "these auctions are WINNER TAKES ALL – meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on." Winners will also have a tight deadline to remove items from the restaurant.

Images from the Bloomingdale location posted by RestaurantEquipment.bid include commercial appliances like ovens and refrigerators, dining furniture, and even the restaurant’s lobster tank.

On Tuesday, FOX 32 Chicago found what appeared to be employees in the back of the restaurant packing equipment, dinnerware, food, and ingredients into vehicles.

Unhappy our camera crews were filming, they asked us to leave and blocked our view with cars.

"I’m in shock because it always stayed busy, and you always were in line to get a table," said Morrissette.

Reports indicate the Orlando, Florida-based company has been struggling to stay afloat in recent years – in part, due to rising lease and labor costs.

Last month, a report by Bloomberg citing people familiar with the discussions, indicated Red Lobster is weighing a Chapter 11 bankruptcy filing to renegotiate burdensome leases and address other long-term contracts.

The seafood chain has had a variety of owners and major investors since it was founded in 1968 by Bill Darden and Charley Woodsby.

General Mills acquired the company in 1970 and helped it rapidly expand throughout the U.S. and Canada, before spinning it off into an independent publicly traded company called Darden Restaurants over two decades later.

Darden Restaurants sold Red Lobster to Golden Gate Capital in 2014. Thai Union, which previously had a one-fourth stake in the company, bought out Golden Gate's stake in the company in 2021.

Thai Union retained a 49 percent stake in Red Lobster, but earlier this year the food producer – headquartered in Thailand – announced its plans to divest. It decided to take a write-off after stating in a regulatory filing that the restaurant chain's "ongoing financial requirements no longer align with Thai Union's capital allocation priorities."

Red Lobster brought in Jonathan Tibus as its new CEO in March. Tibus is considered an expert in developing and implementing restructuring plans at underperforming restaurants, retail and hospitality companies and has led numerous restructuring efforts.

"We like to go here, we like everything to do with shrimp," said Styka. "I feel sorry for the workers – kitchen and the waitresses."

There are also reports that the restaurant's ‘Endless Shrimp’ deal did not help the chain’s financial situation – with customer demand allegedly outweighing restaurant profits.

It is unclear when employees learned the news of the sweeping closures.

FOX 32 Chicago made multiple attempts to reach Red Lobster’s corporate communications team for comment Tuesday but did not hear back.

Fox Business contributed to this report.

EDITOR'S NOTE: FOX 32 has updated the closure list to show the current locations closed according to TAGeX.