Red Lobster Accelerates Nationwide Store Closures
Montgomery, Thursday, 27 August 2026.
Despite reintroducing its famous Endless Shrimp promotion, Red Lobster is closing dozens more restaurants across the U.S. in late August 2026 to stabilize its post-bankruptcy business.
Alabama Footprint Reduction Accelerates
Red Lobster is proceeding with the closure of two Alabama locations, with operations ceasing on September 6, 2026 [1][4]. The Montgomery location on Atlanta Highway and the Huntsville restaurant on University Drive are among the sites scheduled to close, reducing the company’s presence in the state to six operating units [1][4]. This move follows the earlier permanent closure of the Vestavia Hills location in May 2026, which had been the oldest Alabama restaurant in the chain since 1974 [1]. Remaining locations in the state include units in Trussville, Gadsden, Oxford, Dothan, Florence, and Mobile [1].
Bankruptcy and Strategic Restructuring
The seafood chain filed for Chapter 11 bankruptcy protection in May 2024 following significant financial losses attributed to its Ultimate Endless Shrimp promotion [2]. The promotion reportedly contributed to an estimated $19 million loss prior to the bankruptcy filing [2]. Despite reintroducing the promotion in April 2026 after a successful test trial, the company continues to trim its national footprint to stabilize post-bankruptcy operations [2][3]. CEO Damola Ademolekun has stated that the company inherited a damaged brand requiring ongoing repairs and cost reduction measures [3][5].
Nationwide Closures and Market Presence
Beyond Alabama, Red Lobster is closing locations in other states including California and Illinois during late August and early September 2026 [3][6]. The Palm Desert, California location, which opened in 2012, is scheduled to close on September 6 or 7, 2026 [3][5]. Similarly, the Peru, Illinois location confirmed it will close permanently on September 6, 2026 [6]. These closures are part of a broader strategy to evaluate individual restaurant performance and lease terms across the portfolio [5].
Operational Footprint and Future Outlook
The company’s total restaurant count has decreased to approximately 540 locations nationwide, down from over 700 prior to the 2024 bankruptcy [2]. This reduction represents a contraction of 22.857 percent of its pre-bankruptcy footprint [2]. While the Times Square location in New York closed in June 2026 due to construction and building conversion, the company projects net positive income by the end of the 2026 fiscal year [2][3]. Management remains committed to making thoughtful decisions to position Red Lobster for long-term success and stability [4][5].