New York
CNN
—
TikToks of shoppers stuffing their faces with a $20 countless shrimp. More than 100 restaurant closures and 1000's of layoffs. A revolving door of CEOs. Chapter 11 chapter.
Damola Adamolekun, the new chief government of Red Lobster, is taking on a series in turmoil. And he’s solely 35.
“There’s a hole to climb out of, for sure, and that will be the hardest part,” Adamolekun advised CNN final Friday in his first on-camera interview as CEO over lobster tail, snow crab legs, garlic shrimp scampi, crispy dragon shrimp and cheddar bay biscuits.
“It’s been a painful period in bankruptcy, and the closures have affected a lot of people,” he stated as {couples} and households started trickling into the reworked — however largely nondescript — Red Lobster in a Long Island, New York, outlet mall, full with a tank of lobsters at the entrance, a bar and pleasant waitstaff.
Adamolekun, born in Nigeria to a neurologist and a pharmacist, was raised in Zimbabwe and the Netherlands earlier than transferring to Springfield, Illinois, when he was 9. Red Lobster was one in all the first chain eating places he visited in the United States, and it grew to become a “staple” for his household.
In Springfield, he first ate at a Red Lobster along with his dad and mom and two siblings after church one Sunday. Red Lobster was the place he, like hundreds of thousands of Americans, skilled consuming lobster and cracking crab legs for the first time.
Adamolekun needed to lead Red Lobster’s turnaround due to its historical past as the “first really successful casual dining chain in America at scale.” Bill Darden, a pioneer of the informal eating revolution in America, opened Red Lobster in 1968. The chain grew quickly throughout the Seventies and Eighties beneath General Mills’ possession.
He was additionally drawn to Red Lobster due to its “cultural impact.” Celebrities similar to Chris Rock and Nicki Minaj labored there earlier than they grew to become well-known. Beyoncé sang about taking a romantic associate to Red Lobster in her 2016 hit track “Formation.”
After Red Lobster filed for chapter, Flava Flav ordered the whole menu to attempt to save the firm.
“Mr. Flav has done a lot,” Adamolekun stated. “We’re very appreciative of him.”
Improving service and menus
Red Lobster emerged from bankruptcy last month beneath new possession, led by one in all its lenders, Fortress Investment Group. Fortress has initially dedicated $60 million to revitalize the chain.
Adamolekun’s plan for the enterprise doesn't name for a large overhaul. Instead, it's one in all “incremental changes.”
Red Lobster is finished closing eating places, he stated, and he'll focus on bettering desk service, tightening the menu to simplify kitchen operations and sprucing up eating rooms.
The chain should maintain onto Red Lobster’s buyer base of Baby Boomers — round 40% are older than 55, a demographic Red Lobster calls “quality traditionalists” — whereas additionally drawing in a new era of diners.
So flounder is staying on the menu as a result of it’s fashionable with older clients, he stated. But Adamolekun desires to enhance the ambiance to attraction to youthful clients, who're extra loyal to informal eating rivals like Olive Garden.
That means dishes that sizzle once they drop on a scorching stone plate at the desk and truffles that arrive with sparklers on clients’ birthdays. It was the same playbook he ran whereas CEO of P.F. Chang’s, one he referred to as “theater at the table.”
Red Lobster has additionally struggled to constantly appeal to middle-income shoppers with extra disposable earnings, stated Clarence Otis Jr., the former CEO of Darden Restaurants from 2004 to 2014, when Darden owned Red Lobster.
Some analysts say Adamolekun wants a bolder technique to develop Red Lobster.
“It can be incremental change to start, but he has to build it into something more sustainable,” stated RJ Hottovy, an analyst at analytics agency Placer.ai. Hottovy believes that Red Lobster will shut extra eating places in the future, regardless of Adamolekun’s pledges.
“In five years, I bet it’s smaller in terms of unit count, but probably in a more stable position with a slightly more upscale image,” Hottovy stated.
Adamolekun will inherit a series that has slipped for greater than a decade, however whose decline accelerated beneath seafood conglomerate Thai Union Group.
In 2020, Thai Union, a longtime shrimp provider to Red Lobster, gained 49% management of the chain, changing into its majority shareholder. Former Red Lobster workers beforehand described to CNN a poisonous and demoralizing setting beneath Thai Union. As Thai Union put in executives at the chain, dozens of veteran Red Lobster leaders had been fired or resigned in speedy succession.
“I have to believe (Thai Union) wanted to do as well as they could. The fundamental problem is they’re not restaurant operators. They’re vendors for shrimp,” Adamolekun stated.
Last yr, Red Lobster made $20 countless shrimp a everlasting menu merchandise for the first time. It had been a limited-time supply for almost 20 years.
When Adamolekun noticed the $20 countless shrimp deal, he thought, “that’s a very expensive product to give away endlessly.”
The transfer backfired spectacularly for Red Lobster. Customers sat at tables for lengthy stretches of time, consuming course after course of limitless shrimp. Service slowed and wait occasions grew. Red Lobster misplaced $11 million in the quarter following the deal, and Thai Union divested from the chain this year, taking a $530 million loss on its funding. Thai Union’s CEO vowed to cease consuming lobster.
“You stress out the kitchen. You stress out the servers. You stress out the host. People can’t get a table,” Adamolekun stated. “It creates a lot of chaos operationally.”
Thai Union didn't reply to CNN’s request for remark.
Adamolekun’s household moved to Columbia, Maryland, earlier than he was in highschool. He performed free security on the soccer crew after which at Brown University.
After graduating from Harvard Business School in in 2017, Adamolekun joined Paulson & Co., the funding agency based by hedge-fund billionaire John Paulson.
While he labored at Paulson, P.F. Chang’s proprietor put the Chinese restaurant chain up on the market.
Adamolekun noticed a possibility to develop P.F. Chang’s small supply enterprise, and he pitched the funding concept to John Paulson. The firm took a controlling stake in P.F. Chang’s in 2019, and Adamolekun took a seat on the chain’s board of administrators.
Over the subsequent yr, Adamolekun traveled each week from New York City to P.F. Chang’s headquarters in Scottsdale, Arizona. He grew to become P.F. Chang’s chief technique officer, creating its cellular app and supply enterprise.
Then the Covid-19 pandemic hit in March of 2020, and P.F. Chang’s CEO stepped apart a month later. John Paulson requested the 30-year-old who had by no means been a chief government to take over.
Under Adamolekun, P.F. Chang’s was in a position to dangle on throughout the pandemic. Bolstered by its sturdy takeout and supply enterprise, it survived at the same time as dozens of different restaurant chains filed for chapter.
Adamolekun stepped down as CEO final yr. John Paulson and P.F. Chang’s thanked him for steering the chain by the disaster.
His radar quickly shifted to Red Lobster.
In March, as Red Lobster slipped towards chapter, he started doing consulting work on the chain for Fortress, stated the agency’s managing director Morgan McClure. In August, Fortress named him Red Lobster’s CEO.
“We wanted someone who was dynamic,” McClure stated. Adamolekun “can inject some energy into (Red Lobster) and is willing to roll up his sleeves and dig into the nitty gritty of it.”
Red Lobster has suffered from a noticeable lack of funding. It has not saved up with know-how that helps hosts decide wait occasions for patrons at tables or handle stock in kitchens. Customers have additionally complained about staffing ranges. To get monetary savings, Red Lobster stopped utilizing a bartender or a number at sure occasions.
“Those are the most glaring issues — when there’s something really missing from a staffing position,” he stated. “Everybody notices.”
Red Lobster is working on a “brand refresh program” to attempt to make the eating places extra thrilling with new layouts, décor, lighting, music and waiter uniforms. The problem might be to change the setting with out turning off Red Lobster traditionalists.
The countless shrimp deal alienated conventional clients, he stated, who had been used to coming in for a quiet lunch. Instead, they discovered themselves sitting subsequent to giant teams stuffing their faces with shrimp and filming on TikTook.
Adamolekun didn't rule out bringing again an countless shrimp promotion in the future however promised it will not overwhelm workers and disrupt eating places.
“I never want to say never, but certainly not the way that it was done,” he stated. “We won’t have it in a way that’s losing money in that fashion and isn’t managed.”
