Red Lobster's Bankruptcy Highlights How Communicators Deepen Trust During Major Restructures
Hold the cheddar bay biscuits — Red Lobster has filed for bankruptcy. The popular seafood restaurant chain’s bankruptcy filing announcement wasn’t unexpected. However, according to a report from NPR, the closure of dozens of Red Lobster locations, sell-offs of equipment from the buildings, and job losses took place just before the filing. While there’s been speculation that missteps like the chain’s unlimited shrimp deal were to blame, the reality is more complicated, with sale-leasebacks of the land restaurants sat on, poor business decisions, and bad management.
In a court filing obtained by CNBC, new Red Lobster CEO Jonathan Tibus pinned blame for the bankruptcy on a “difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry.”
The reality here is that bankruptcies happen. But how can we communicate about them to employees and stakeholders? No matter the company or specialization, there are a few core concepts that comms pros need to hold on to during bankruptcy proceedings to keep things moving along in a smooth and orderly fashion.
From CommPRO:
Hold the cheddar bay biscuits—Red Lobster has filed for bankruptcy. The popular seafood restaurant chain’s bankruptcy filing announcement earlier this week wasn’t unexpected. However, the closure of dozens of Red Lobster locations, sell-offs of equipment, and job losses occurred just before the filing. Missteps like the chain’s unlimited shrimp deal were speculated to be the cause, but the reality involves sale-leasebacks, poor business decisions, and bad management.
In a court filing obtained by CNBC, new Red Lobster CEO Jonathan Tibus blamed the bankruptcy on a difficult macroeconomic environment, underperforming restaurant footprint, failed strategic initiatives, and increased competition within the industry.
Communicators should read this article because it provides valuable insights into handling communications during bankruptcy. The article emphasizes the importance of humanizing business news, anticipating the rumor mill, and fostering effective leadership and trust during times of major change. Megan Weekes, Chief Marketing Officer at Speekes, underscores the need for transparent, humane communication to maintain employee trust and engagement.
This article serves as a critical guide for communicators, offering practical advice on educating employees about the implications of bankruptcy and ensuring that leadership communicates clearly and honestly. By managing turmoil effectively, communicators can help deepen trust among employees, stakeholders, and leaders.
