Red Lobster is planning additional restaurant closures in 2026 as the seafood chain continues its turnaround efforts following bankruptcy. The company, which shuttered around 130 locations during its Chapter 11 restructuring, is now reviewing its real estate portfolio to reduce costs and focus on higher-performing markets.

Many of Red Lobster's current challenges trace back to 2014 when private equity firm Golden Gate Capital acquired the chain for $2.1 billion and sold its real estate properties for $1.5 billion in a sale-leaseback transaction. While this move provided short-term liquidity, it left the chain paying substantial rent, with annual lease obligations climbing to about $190.5 million by 2023, roughly 10% of its revenue.

Since emerging from bankruptcy under new ownership by RL Investor Holdings LLC, Red Lobster has revamped its menu and marketing strategy. CEO Damola Adamolekun told The Wall Street Journal that sales are up around 10% from last year, though the chain has not yet returned to pre-bankruptcy levels. The company has cut costs by laying off 10% of its corporate workforce and is renegotiating with vendors amid rising seafood prices. Industry analysts warn that aggressive cost-cutting can backfire, potentially damaging service quality and customer satisfaction.