How private equity helped sink Red Lobster

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Analysts say endless shrimp promotion was not the reason Red Lobster filed for bankruptcy. The bigger culprit was the company investing in private equity.
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#RedLobster #PrivateEquity #Bankruptcy

Опубликовано:

2 июн 2024

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Комментарии : 526

@barbm8822 Месяц назад

Private equity companies are sinking everything. Restaurants, retail, real estate, even hospitals.

@ritaroad Месяц назад

Nursing homes.

@michaeldelgiudice1057 Месяц назад

YES! and is anyone listening?!

@alelectric2767 Месяц назад

It’s by design. It’s how they roll

@pkal244 Месяц назад

Red Lobster and the other businesses listed are sinking ships anyway. They chose to get bought out by private equity because they were headed for bankruptcy anyway. I guess next time just let them fail quicker.

@julienrockingham-ip4co Месяц назад

Yeah, but they call me stupid when I say that

@user-rj8nm9gy6w Месяц назад

Greed is destroying America.

@blazeroranger Месяц назад

Biden and democrats for raised taxes and climate change

@blazeroranger Месяц назад

So lock up Biden and whole dems!!!!!!! And lock you up for pulling us all down since you voted for them

@jogmas12 Месяц назад

But Gordon Gecko 🦎 said greed is good. 😊

@SSNESS Месяц назад

Politicians do insider trading

@ottomatic3123 Месяц назад

Always has.

@bobbymoss6160 Месяц назад

Private equity should be banned, just like lobbying. Absolutely disgusting.

@ottomatic3123 Месяц назад

Lobbying is actually crucial to good governance; although, it needs to be robustly regulated. Unfortunately, those who regulate it are the lobbyist's targets.

@Ikecanada-rh3ju Месяц назад

@@ottomatic3123how so?

@stevenboddy4232 Месяц назад

@ottomatic3123 lobbying is good yes, when done right. What we have is no different than china or russia. Our lobbyists give money for favors, you know, commonly known as bribes.

@ottomatic3123 Месяц назад

@@Ikecanada-rh3ju Lobbyists have the expertise to advise law makers in the implementaion of good policy. However, this "special interest" is ripe for corruption and the encouragement of bad policy. That's why robust regulation and oversight is necessary.

@agf1700 Месяц назад

Asset stripping…..think that’s what Blackstone Group does too.

@alvilla701 Месяц назад

I believe this is one of the reasons why homes are too expensive, probably the main reason

@flohough1870 Месяц назад

And a lot of that is the problem, with foreign investors being the ones to either buy or finance the purchase.

@suzyq1607 Месяц назад

Yes and why there is nothing but homes becoming rentals now also !

@Astrobucks2 Месяц назад

Incorrect. PE owns less than .6% of us single family homes. It's a nothingburger.

@alvilla701 Месяц назад

@@Astrobucks2 last year about 30% of sold homes were bought by investors I'm not an expert, this is just some information I found in different places, so do your own research

@JuanMartinez-xf3uz Месяц назад

Airbnb is largely to blame for that. And NIMBY's with rigid views on zoning laws.

@TakenTook Месяц назад

They left out Toys "R" Us on the list of successful companies that were ruined by private equity

@Astrobucks2 Месяц назад

Toys was dying and would have died on its own without PE help. Also, it's notlike you can't buy toys anywhere else. The demand went to another firm, and those stronger firms hired the employees of toys r us. That's how our economy works.

@TakenTook Месяц назад

@@Astrobucks2 -- They were actually holding on pretty well despite Amazon and other online platforms, especially when they still had Babies R Us selling baby clothes and strollers and things. But just like with RED LOBSTER, they had the real estate sold out from underneath them, and had to start paying rent, and that's what finally made it something that couldn't be sustained. At one point, I think the employees were going to try to form a group to buy the company and run it, but they couldn't raise enough money.

@entezami777 Месяц назад

@Astrobucks2 is the Easter bunny real in your world too?

@TakenTook Месяц назад

@@entezami777 -- Astro probably thinks that the Laffer curve and trickle down economics are valid, too.

@Astrobucks2 Месяц назад

@@entezami777 Do me a favor and go buy some toys right now. Let me know if you're able to do so. Thanks

@Me97202 Месяц назад

Not the endless shrimp. More like the endless greed.

@angelisa368 Месяц назад

💯

@phineasfaber5159 17 дней назад

Lobsters are bottom feeders but private equity will go lower than anyone for the bottom line.

@MariaMartinez-researcher Месяц назад

This video is too short to explain all what happened. Please take a look at the recent John Oliver's segment about the subject. This business didn't die a natural death, it was killed, and not by the shrimp.

@kittycuddler5973 Месяц назад

I've never seen his show. Looked through, couldn't find the episode you are referring to. Can you give me the number or title? I'd like to watch it, thanks.

@youtubewatcher4603 Месяц назад

It didn’t help that they dropped all of the less expensive shrimp suppliers.

@TravelDaIslands Месяц назад

Thank you he did go into more detail. God bless you.

@ShannonsBibleStudy Месяц назад

They didn't do a great job of explaining private equity firms or asset stripping. Their references weren't helpful.

@Neuzahnstein Месяц назад

@@kittycuddler5973 maybe last sunday video, which means it will be available tomorrow.

@mkaltreider5322 Месяц назад

of course "Golden Gate Capital declined to comment." Financial predators for businesses.

@tishw4576 Месяц назад

A seafood restaurant is one thing, hospitals and medical facilities are completely different. You heard of small town hospitals closing? Guess what? They aren't money makers so they are shut down and hard working, tax paying, private insurance paying citizens have no emergency or local care in their area.

@mph5896 Месяц назад

Small hospital system I work for, the high up management pays themselves enormous pay. CEO makes $7m a year, next guy down $4m. Money needed to take care of patients.

@whitetrashmillionare4858 Месяц назад

@@bryanx590 It's the rich Democrat voting CEOs

@anniesshenanigans3815 Месяц назад

Private Equity is how these Billionaires are doubling their income.

@danielmartin7838 Месяц назад

Cool screen name.

@Teresa.Says.It.Here.2 Месяц назад

Who are these private equity owners??? U.S. owners? Foreign owners? How is legislation going to stop this hemorrhaging?

@rick03168 Месяц назад

Big rich people

@MariaMartinez-researcher Месяц назад

John Oliver's last show was about those companies. Both American.

@alexlopez5800 Месяц назад

Foreign owners. Just like housing. Insane and needs to stop

@josefeibl8230 Месяц назад

You realize that the majority of US government debt is held by foreign countries?

@Teresa.Says.It.Here.2 Месяц назад

@@MariaMartinez-researcher Thank you. I did not see that episode.

@ec5423 Месяц назад

corporate greed like the housing crisis of 08

@Astrobucks2 Месяц назад

Are we gonna talk about the gse loans which caused it? "everyone deserves a house" mentality pushed by Clinton and Bush, which resulted in cheap money being flooded out of the GSEs to the originators.

@astormdrain Месяц назад

@@Astrobucks2 That’s just a small piece of the puzzle. The real culprit is Reagan deregulating the financial sector in the 80s which enabled an escalation of risk-taking that produced the crisis. ARMs did not exist before 1982, and 25 years later they would explode in our faces.

@joshuauriarte452 Месяц назад

Maybe It's time for this to be illegal? It should of been banned decades ago as it harms more then saves.

@bobbymoss6160 Месяц назад

Your favorite politicians in Washington DC is getting so much kickback they'll never be banned.

@briancollins3704 Месяц назад

Go live in the country you support.

@IRaoulDuke Месяц назад

No way dude how are our elected rulers gonna make cash?

@jonnyveltri610 Месяц назад

Vote differently next time my friend!

@mia1shooter Месяц назад

Red lobster have been doing endless shrimp fir decades...its not the issue

@UnicornDreamsPastelSkies Месяц назад

Agreed, it wasn't until last year when endless shrimp became PERMANENT that it became PART of the problem... just yes, certainly not the WHOLE problem, a lot of it really began in 2014 with private equity and property leasebacks.

@nicolewembley3093 Месяц назад

We knew it was more then all you can eat shrimp, which is never a bright idea. It was much deeper, good report.

@Astrobucks2 Месяц назад

Once again, NBC news getting it wrong with a half baked story. They throw up a clip of Pretty Woman and call it a day. lol

@JohnSmith-qe6fb Месяц назад

I worked for a small bus company that did the same thing- locked the doors and didn't let anyone know they shut down. We showed up to a chained door and no idea we were out of a job. Despicable.

@libiure Месяц назад

i worked in a grocery story chain corporate office in the 90's - we closed a grocery store - the owner put a chain on the door at 3am - didn't even tell the managers - it's to prevent theft - when people know that they are losing their jobs - they have nothing to lose by stealing or giving away the store ...

@anythingandeverythingABCLife Месяц назад

you acting like you got scammed, just like the guy in this video. the business shut down; they had major big problems to deal with..

@libiure Месяц назад

@@anythingandeverythingABCLife the workers are expected to be loyal to the company and to give a 2-week notice when quitting - but businesses' loyalty is only to their bottom line - i think it's cold - when we closed down my friends' business in 2020 we gave the employees a 3 month notice and a $1/hour raise for the last 3 months so they could get a larger unemployment check - but that's rare for a company to do ..

@user-du4ky2fy7q Месяц назад

American corporations do this every day in foreign countries. They close down shop and never pay the workers.

@michaelfincham2749 Месяц назад

When I hear private equity, I think PIRATES. I also think. How long will this company survive.

@brad238899 Месяц назад

You lost your job because of Private Equity then your dog gets sick and you go to the vet where you get a $4000 bill for what used to be $400 because of.... You guessed it. Private Equity.

@siriusgd4753 Месяц назад

How private equity is destroying everything American. Corporate greed goes unchecked. Just as the Republicans want it.

@SouthernAngler Месяц назад

Republicans? Democrats don't care anymore about these matters... why are they silent. they are on the payroll. this has been going on for a long time now.

@IRaoulDuke Месяц назад

Weird how no democrats put forth bills to outlaw it, ever. Buh buh Republicans......🐑🐑

@whitetrashmillionare4858 Месяц назад

More like the election stealing Democrats would do!

@robd7934 Месяц назад

Another casualty of private equity’s corporate greed. They did far more damage than the bottomless shrimp! How private equity is legal is beyond me.

@Astrobucks2 Месяц назад

Red Lobster was a dying business with an aging customer base. PE wasn't the issue, the dying business was the issue.

@robd7934 Месяц назад

@Astrobucks2 Red Lobster is definitely a dying business. The brand is very stale, and when I lived near one, only old boomers dined there. That said private equity didn't help. It never does.

@user-wr4yl7tx3w Месяц назад

Trump will give private equity whatever they want.

@SouthernAngler Месяц назад

you are correct but so does Biden.

@user-du4ky2fy7q Месяц назад

YEs. Trump got rid of all the financial protection laws that could have prevented this mess. and the GOP applauded him for it

@truthiscensored Месяц назад

Red Lobster been running Endless Shrimp promotion forever. I worked at Red Lobster in 2002 -2010 off and on, and they had the promotion back then...plus the promotion only last like a month or 6 weeks. They do lose money during the promotion but that ain't the sole reason. And I feel the worker's pain. One Red Lobster location I worked at closed at a moment's notice. One day we had jobs, the next day we didn't. The least they can do is give a heads up, so people can find other jobs or make plans

@brettr5188 Месяц назад

Finally an accurate report, not blaming endless shrimp which had such a small loss compared to the companies overall debt.

@ricnyc2759 Месяц назад

They own everything. Any time another company starts to grow, private equity buys them. It's "capitalism" with no competition.

@forgingstrength6119 Месяц назад

Private equity has destroyed many industries.

@loreneaustin5304 Месяц назад

They can't blame it on all you can eat Shrimp. Back to the 80's. Watch your money and future.

@theshamlock Месяц назад

Private equity ruins everything except the investors' bank accounts.

@aroundandround Месяц назад

Finally media wakes up. I was laughing at how naive the popular media narrative was until recently. Almost like no journalist had any idea of how small $11M is relative to the company’s book value and couldn’t bother doing the slightest bit of research.

@markstocker5121 Месяц назад

Vulture capitalism..

@jameshoeve4466 Месяц назад

Constant corporate crime. Crooks.

@waterfuntimes Месяц назад

Another business gutted by PE. They're literally shutting America down, while selling off assets and pocketing the profits.

@SSNESS Месяц назад

Mitt Romney does this

@selanryn5849 Месяц назад

Remember, Reagan promised the wealth would start trickling down any day now.

@Betty-ub1jc Месяц назад

Yes, I don't understand why people seem to think that he was some type of great/good president. Along with his kooky wife who got her advice from psychics, while whispering in his ear, telling him what to do as president. He ruined schools in California and health care for the mentally ill 😤

@Love-nj2fw Месяц назад

Private equity is the devil reincarnated, hilarious they blamed it on endless shrimp

@Suitednlooted Месяц назад

Endless shrimp has always been around. I don’t known why the media was pushing this narrative.

@DemarcusQ Месяц назад

With high prices like $200 Million for rent, it’s no wonder little companies dealing with money want MORE of it to be on the same level as everyone else who’s rich. There’s a new quota in people, if your bank account is $1000 shorter you’re just not doing good enough.

@marykeys10 Месяц назад

Private equity works like a pack of locusts

@h0lyavenger Месяц назад

how private equity will be the downfall of america

@wiskyd Месяц назад

Yes but they don't care, they only care about themselves.

@FGH9G Месяц назад

YES! It's about time the mainstream media speaks out against private equity!

@grayrabbit2211 Месяц назад

@0:56 -- He called it Red Slobster! That's what I called it too after seeing too many Red Lobster patrons acting like slobs.

@elizebanarsee6767 Месяц назад

Your point being?

@user-iy3dx1zl9q Месяц назад

private equity stuggles with quality of life issues. Who coulda guessed that.

@jeffmacarthur9722 Месяц назад

These folks are shellfish…

@lamontbeverly7374 14 дней назад

😂

@teksight9714 Месяц назад

Private equity killed Toys R Us

@Rushinator1 Месяц назад

Why am I not surprised that the endless shrimp was a scapegoat to put the blame on customers when it was the greedy executives who stripped the company & caused the company to lose $200M/year which is nothing compared to the endless shrimp loss leader.

@AlexRodri912 Месяц назад

So if got this . A firm purchased a company that is on decline. However they have valuable assets like real estate. So they sell the real estate, make more money that way than keeping the restaurant opened. Then file for bankruptcy and the law shields them from paying all those taxes? That’s a genius way to get out of a failing business.

@roachtoasties Месяц назад

I agree endless shrimp was nonsense. Why did all the news organizations keep reporting that crap?

@jmack8640 Месяц назад

Because media is owned by.... Private Equity!

@pwu8194 Месяц назад

The same thing happened to IBM. Nowadays, IBM rent its buildings. It doesn't own them anymore.

@GodSonBlessed Месяц назад

We all knew it was bs when they blamed the endless shrimp.

@bobcostas5094 Месяц назад

I love Red Lobster. The food, the atmosphere, the friendly staff, and the amazing memories.

@mochi_salamanders Месяц назад

Restaurants say they don't tell anyone about closure because everyone will quit and they won't be able to staff the last week. It's a despicable thing. I've seen it at EVERY restaurant closure I've ever seen and usually management will have a two or three day heads up, although sometimes they don't find out until that morning. The industry is completely income driven and all nods to human decency are done for PR and stock holders. The general shadiness has gotten so much worse since the public stock optional of most corporate chains, and also since COVID.

@user-ll4lf5go1m Месяц назад

Private equity=another way the super rich get richer and the rest of us suffer.

@reecespbcups Месяц назад

In 2022 Red Lobster had $2Billion+ in assets

@neilkurzman4907 Месяц назад

No, it didn’t the hedge fund that bought it sold all the real estate off and then negotiated higher than market leases for all its locations

@reecespbcups Месяц назад

@@neilkurzman4907 you’ve parroted the vid…red lobster was solvent and had Billions in revenue in 2022 🚨 the private equity strategy gutted their viability.

@MikeFoster-sy8jl Месяц назад

Old red lobster location turned into a new bank I’ve never heard of

@Gary-ee3kq Месяц назад

New credit unions are opening up here. Debt and lending is a biz that will never go away as long as we stay a capitalistic society.

@waterfuntimes Месяц назад

Asset stripping... "So it's sorta like stealing cars and selling off the parts"...

@iamkayhud Месяц назад

The moment a company is sold to a private equity company sell your stock because the writing is on the wall!! If you hold that stock for too long you’ll take a hefty loss.

@danmark1731 Месяц назад

Glad they mentioned that there are times that it is a benefit. Comes down to the boards of these companies and lack of good faith

@jimcypher Месяц назад

"It's a bust out." - Tony Soprano

@TheDigitalGrowthHacksClub Месяц назад

They could have just licensed them dang biscuits for cashflow...

@porquee Месяц назад

We're running out of nonviolent solutions to deal with these people

@jwood8397 Месяц назад

Long John Silvers did that in the town I lived in. Overnight, took down the signs, drive up menu, everything. And stuck up a sign for the employees

@waterfuntimes Месяц назад

From Google: "In November 2022, Long John Silver's was acquired by Four Oaks Partners, a group of investors led by Bob Jenkins, himself a Long John Silver's franchisee and president of Charter Foods."

@adamzielinski2001 Месяц назад

Wow how sad 😢. Their CEOs should be held accountable. I guess the trickle down effect economics didn’t work here hunh Trumpers?

@EricSchumann007 Месяц назад

No Levite squire strip Realestate then the china company forced soul source their ship and jacked up the price

@adamzielinski2001 Месяц назад

@@EricSchumann007 nice try on the name calling. I know thats derogatory Philistine Giant. Also misinformation on Red Lobster being involved in China 🇨🇳. There’s no proof of such a claim. Just because you think we don’t read the Bible doesn’t mean you need to mislead the public with disinformation or name call.

@adamzielinski2001 Месяц назад

@@EricSchumann007 Also thou speak terrible English. Perhaps educate yourself in research before making derogatory comments and insulting others.

@williebeamon3083 Месяц назад

What does Trump have to do with any of it? 2014 was an Obama year when golden gate capital bought red lobster if you want to be stupid and petty.

@carl-cr7rp Месяц назад

Government needs to step in and control this BS.

@managingmonasmoula9811 Месяц назад

It’s like these companies are taking a wad of cash from the devil at a critical time. Then the devil drags the company through the mud and so far down that there is no redemption or survival. What a disaster!

@GregoryCunningham Месяц назад

Thank you for the honest reporting. They think we are stupid enough to believe their lies.

@Zeus0886 Месяц назад

They just sucking out all the value out of everything and just leaving it to rot

@kimberlyfamoly1963 Месяц назад

All these big company's buying up the smaller reginal, family or closely held owned companies have runed many of them. When this happens the quality goes down and customers just stop going.

@danielleweber8914 Месяц назад

Safeway was saved? Safeway used to be a great grocery store with great tasting and affordable deli items. Now, it is an absolute mess with stressed out overworked staff and irritated shoppers

@brianst.bernard1009 Месяц назад

I thought it was the bottomless shrimp 😂😂

@user-dh2uy8uh1n Месяц назад

This happens many times when private equity funds come in. They load on debt and pull out the money, leaving a shell which is unable to sustain operations. By the time things collapse, they have removed their investment and everyone left looses. It is deliberate pursuit of short term returns instead of sustained operations.

@joshuapaul349 Месяц назад

A faceless corporation didn't fill you in? Shocker.

@jeffperteet2327 Месяц назад

They will be coming for legacy television networks eventually

@user-fs6fv3qy8f Месяц назад

Sinclair is way ahead of you

@DemarcusQ Месяц назад

Selling lobster shouldn’t be this hard. It’s greed, envy, comparison in colleagues that let their place of business get to their head and later feel like they deserve just as much as you if not more. Now nobody gets paid.

@Grace285 Месяц назад

I stopped going to red lobster when they took catfish off the menu. These chain restaurants have their tried and true customers and they want to come in and put these fancy menus when people aren’t coming to these restaurants for all of that.

@bobzelley5100 Месяц назад

21 Pennsylvania elder care facilities bought by a Private equity firm filed for bankruptcy in past two weeks . 12 facilities in the Pittsburgh area .

@williebeamon3083 Месяц назад

This is how black rock will make us eat bugs. Take notice.

@StanHowse Месяц назад

Yup..

@Grandizer8989 Месяц назад

My neighbors father literally invented Private Equity awhile back. Now his son runs a PE firm in Boston. Nice guy though.

@DrJeffreyTran Месяц назад

Wait till you see private equity in healthcare. Be smart, ask if your doctor is a corporate owned doctor and run!

@chihirostargazer6573 Месяц назад

Everything will be corporate owned if people don't stop this greed. Without strict regulations to protect society, capitalism turns into corporatism.

@nightrunner1456 Месяц назад

35-year ago prices were too high, on what you were getting! I work at a quality Restaurant, great real food and a great price.

@RayNLA 24 дня назад

It’s like refinancing your home pocketing the equity, then walking away from it!

@JudgeCrater22 Месяц назад

Private Equity = Wolves Of Wall Street

@ThailandEnthusiast Месяц назад

Rent is the biggest reason for businesses to go under for both small and big.

@veramae4098 Месяц назад

This is what happened to Sears.

@venganzamujer354 Месяц назад

The one by me in California wAs super dirty…..the silverware wasn’t even washed looked like

@UnicornDreamsPastelSkies Месяц назад

"Private equity firm." **Cue Price is Right losing horns**

@user-fp8hq3bx1b Месяц назад

I’m looking forward to the Red Lobster documentary.

@goodpainlive Месяц назад

Bought the chain, bled the company blind and let it go bankrupt while they lined their pockets. Corporate raiders.

@johnharbaugh9471 Месяц назад

When did a private equity company save a business? Ever? Name three times (3) please.

@josephdell8056 Месяц назад

Its absolutely pathetic that workers werent at least told of the closing!!!!

@Sdedalus-m1f 20 дней назад

New York mobsters call this a "bust out". Its like extortion.

@drwisdom1 Месяц назад

I like that their are two reasons for Red Lobster's failure. The second reason is financial and logically explained by numbers while the original reason is clickbait BS about people eating too much and somehow not being able to control it.

@derek04151 Месяц назад

They sucked it bone dry and then shut it down.

@b.m2133 25 дней назад

I knew a $11 Million loss wouldn't close Red Lobster. You'd be surprised how much debt these large companies run on and in my opinion, barely can pay back the loans.

@hukabuktx6766 Месяц назад

Kind of a mafia type a situation.

@josefeibl8230 Месяц назад

Not at all, must be a clueless capital fund investor.

@alwaysradical Месяц назад

We are blaming private equity?

@ayoutubechannelname Месяц назад

They are, and if the term “private equity” didn’t exist, they’d probably blame some even broader category of firms.

@matth7448 Месяц назад

it wasnt endless shrimp.... Its private equity ripping the copper out the walls to make a buck and then dont care what happens

@justonemori Месяц назад

I saw a commercial real estate ad for a Red Lobster building that assured the tenant was long term. I was thinking why would in the world would a big company do this?

@Case16710 Месяц назад

Dead Lobster

@ryanjoseph8694 Месяц назад

What that old man say “Red Slobters.”😂😂😂😂😂

@angelisa368 Месяц назад

This is crazy- what happened to Darden?? I thought they owned RL??

@stevenholman9288 Месяц назад

The companies can also do that before any private equity gets in volved.

@hitendoshi108 Месяц назад

Usually Private Equity firms are on the lookout for businesses with low levels of debt and valuable physical assets that they can end up owning/controlling via an LBO (Leveraged Buyout) by promising the top management and ownership a lucrative amount to convince them to sell, then taking on a lot of debt to fund the purchase of their business (some of those proceeds go to payoff the current management), and finally stripping the business of its key assets and transferring the debt to the business. These firms want to end up secretly owning everything while leaving governments and people in debt.