However the firm’s CEO faulted proprietor and key seafood provider Thai Union for its position within the shrimp debacle — and in Pink Lobster’s trajectory — in a submitting on Sunday.
Jonathan Tibus, a turnaround professional who took the CEO job in March, wrote that Pink Lobster had lengthy purchased a lot of its shrimp from proprietor Thai Union.
“I perceive that Thai Union exercised an outsized affect on the Firm’s shrimp buying,” Tibus mentioned.
He mentioned that Pink Lobster executives objected to then-CEO Paul Kenny’s Could 2023 plan so as to add $20 limitless shrimp to the menu completely in Could 2023. However Kenny solid forward, a call that price Pink Lobster $11 million in operational and monetary bills, he added.
Whereas limitless shrimp boosted site visitors to the chain, income suffered as prospects took benefit of this low-margin deal.
The connection with Thai Union “strained” Pink Lobster’s provide chain, and Kenny circumvented his firm’s regular shopping for processes, per Tibus. Kenny axed two shrimp suppliers “in obvious coordination with Thai Union and below the guise of a ‘high quality overview.'”
As Pink Lobster doubled down on limitless shrimp, its provide chain was strained, “leading to main shortages of shrimp,” Tibus mentioned.
Regardless of Pink Lobster’s dire straits, Thai Union has not supplied further monetary help, per Tibus. He wrote that Pink Lobster’s debtors are investigating the relationships amongst Kenny, Thai Union, and Pink Lobster.
Thai Union didn’t reply to a request for remark.
Issues went past shrimp
Pink Lobster is probably greatest recognized for the all-you-can-eat shrimp promotion.
In an earnings name final November, Ludovic Garnier, the finance chief of Thai Union, informed traders the promotion was “one of many key causes for the losses we generated” within the third quarter of 2023.
As BI reporter Emily Stewart wrote earlier this month, the issue was by no means simply shrimp: “The model has been tormented by varied issues — waning buyer curiosity, fixed management turnover, and, as has turn into a typical story, non-public fairness’s meddling within the enterprise.”
On Sunday, the seafood chain mentioned in a assertion that it had filed for Chapter 11 chapter. Pink Lobster mentioned its eating places will “stay open and working as common in the course of the Chapter 11 course of.”
