This Bankruptcy is a Warning
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Archived from the IMDb Discussion Forums — Economics, Business, Money, Finance
TaraDeS — 1 year ago(June 01, 2024 07:39 PM)
This Bankruptcy is a Warning
The Red Lobster seafood chain was a premier brand in the United States.
Their bankruptcy is a lesson in how financial firms can undermine a company.
The Red Lobster at Times Square:
Outside, tourists push past pulsating billboards, hawkers and street artists, inside two men hang out at the bar, a few tables are occupied by families. Sporting news flashes unnoticed across a TV screen. The branch in the heart of the city that never sleeps is considered the flagship of the seafood restaurant chain. For many Americans, a visit is part of the New York experience. Maybe it's just a coincidence that late on Thursday last week the atmosphere there was like that of a train station waiting room. But perhaps it has something to do with the fact that the company, founded in 1968, had just filed for bankruptcy.
Red Lobster isn't just any restaurant chain, it's an institution.
It all started with Bill Darden, a young entrepreneur from Georgia who founded his first restaurant at the age of 19. Contrary to the laws in the southern states at the time, he refused to enforce racial segregation in his bars. While McDonald's and Kentucky Fried Chicken relied on fast mass delivery, Darden's idea was to offer more exclusive dining at affordable prices. With specialties like Popcorn Shrimp and Lobster Lover's Duo, a dish that combines Pacific and Atlantic lobster tails and most notably Cheddar Bay Biscuits.
The chain's approximately 700 restaurants became popular spots for birthday celebrations and graduation parties.
End of a Success Story
While Red Lobster was once an American success story, the bankruptcy is a lesson in how monopolistic structures and resourceful financial firms can undermine a company - to the detriment of customers, employees and the general public. And it's a warning, because the methods that brought Red Lobster's downfall are becoming more and more widespread.
When news of the bankruptcy broke, stock analysts and business media quickly found the reason: Endless Shrimp. That was the name of an offer where guests paid $20 (more later) and then could eat as many shrimp as they wanted. The promotion actually attracted more customers, but it was an expensive pay-as-you-go deal. Also because videos of eating competitions were posted on TikTok.
In the last quarter of 2023 alone, the loss from shrimp was around $11 million. But it quickly became apparent that there was more to it. With 49% Red Lobster's largest individual owner is Thai Union Group, one of the largest global fishing companies. It belongs to the billionaire clan of CEO Thiraphong Chansiri, whose father and uncle founded the company as a tuna cannery in the 1970s.
Thai Union shrimp peeling plant in 2016.
Thai Union is one of the world's largest seafood distributors and was a longtime Red Lobster supplier.
Thai Union has been an important supplier to Red Lobster for almost as long. Thai Union first bought a stake in the US chain in 2016 and increased its stake in 2020. Then came the pandemic, which hit Red Lobster like the rest of the restaurant industry. At the beginning of 2023 Thiraphong Chansiri let it be known that he was planning to leave. What followed instead was Endless Shrimp, a losing proposition for Red Lobster, but not for the owners of Thai Union. That raises the question of a conflict of interest, as the interim CEO of Red Lobster noted in the bankruptcy filing last week.
Thai Union CEO Thiraphong Chansiri in 2017.
Chansiri swore he would never eat lobster again after the company divested from Red Lobster this year.
Takeover, Pandemic and Inflation
Perhaps Red Lobster would've weathered the shrimp sale, the pandemic, and subsequent inflation better if the company hadn't already been in dire financial straits. This isn't due to Thai Union, but to a financial firm called Golden Gate Capital, a private equity firm. It acquired Red Lobster in 2014 for $2.1 billion.
This is how the private equity money machine works:
First the investment companies collect money from investors, usually pension funds, foundations, sovereign wealth funds or very wealthy private investors. For the privilege of trusting such smart players with their capital, these customers pay hefty fees and 20% of the profits. Then the private equity company hunters start looking for takeover targets. If they find what they are looking for, they take part of the capital collected from investors as a down payment – similar to buying a house. Most of the rest doesn't come from their own coffers either. Instead, the company hunters get it on credit.
Company as a Cash Machine
The nice thing for the company hunters is, that the company taken over is responsible for the repayment and interest payments, not the private equity firm. As if that weren't enough, private equity firms often take on additional debt on the company, which they then pay out as profits. In other words, they use the acquired companies like cash machines. Golden Gate Capital resorte -
TaraDeS — 1 year ago(June 01, 2024 08:07 PM)
by Joanna
June 01, 2024 09:42 PM
Member since October 4, 2017
It looks like a fun place to go work.
Seems, you need to hurry if you want to work for Red Lobster (closing).
Thai Union will be happy if you peel the shrimps.
Hmmm, we could've a peeling competition.
Do you have experience peeling shrimps?
Before the first bets are made: I'm well trained and damn fast at it.
These brown North Sea shrimps taste much better than the pale deep sea shrimps.
"There she blows!" (Moby Dick) -
TaraDeS — 1 year ago(June 01, 2024 08:18 PM)
by /. June 01, 2024 09:45 PM
Member since April 2, 2019
We have 27 locations in Canada. About 30 years ago many of them closed.
It's not where I would go if I wanted good seafood though.
Unfortunately, I've never eaten at Red Lobster.
It's always sad when an old (actually healthy!) company goes bankrupt. -
Joc Spader — 1 year ago(June 01, 2024 08:27 PM)
The photo of the shrimp peeling plant. I wonder if machines can clean and devein all the little shrimp in frozen foods or it has to be done by hands? I'll look for some more videos. All the shrimp in this video appear the same size catch.
Tell you what…When I send my ex-wife her money…you can lick the stamps. -
TaraDeS — 1 year ago(June 01, 2024 09:16 PM)
by Joc Spader June 01, 2024 10:27 PM
Member since July 2, 2018
The photo of the shrimp peeling plant. I wonder if machines can clean and devein all the little shrimp in frozen foods or it has to be done by hands? I'll look for some more videos. All the shrimp in this video appear the same size catch.
Shrimp Peeler
[video]
It's possible, but used to be cheaper in low-wage countries to have them peeled manually.
Inventors' Day: Alwin Kocken presents his Shrimp Peeling Machine
Kocken's patented machine works since 1985 and he plans to continue.
Instead of asking him, our government spent EUR 2,3 million to develop a new one.
Will the peeling of North Sea shrimps in Morocco soon be over?
https://www.butenunbinnen.de/nachrichten/krabben-pulen-marokko-nordsee-100.html
May 15, 2023 -
Joc Spader — 1 year ago(June 01, 2024 11:46 PM)
Hey Tara. Chrome translated the entire article into English. The word crab in talked about instead of shrimps? They are mentioned towards the end tho. I'm going to buy some of this on Monday.
15 May 2023. Authors:Sonja Harbers
Will the peeling of North Sea crabs in Morocco soon be over?
Crab peeling machine tested - Bremerhaven Thünen Institute involved
Crab peeling machine tested - Bremerhaven Thünen Institute involved
Image: dpa | Mohssen Assanimoghaddam
So far, crabs are mainly sent to Morocco for peeling. However, researchers from Bremerhaven are currently working on a machine that could revolutionize the market.
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Last year, the state of Lower Saxony released 2.3 million euros to secure the domestic crab fishery in the long term. In order to obtain the meat of the North Sea crabs, the majority of the catch landed in northern Germany is currently transported to Morocco for manual peeling. The main reason for this is the cost of labour. These transports are repeatedly criticized by environmental and consumer protection groups.
Part of the Lower Saxony research project includes the development of a prototype of a crab peeling machine using ultrasound technology, which has been planned for years. The Thünen Institute of Sea Fisheries in Bremerhaven is leading the project.
A man with glasses stands in front of a ship and looks into the camera.
Arne Schröder from the Thünen Institute in Bremerhaven coordinates the research project. Image: Private
How far have the researchers progressed?
"We are in the middle of the project's critical phase," says project coordinator Arne Schröder, a biologist at the Thünen Institute. "It's going pretty well, new ideas and data are coming in almost every week." But there isn't a finished machine yet.
The researchers are currently not only having the prototype of the machine developed, but are also analyzing how economical the device is. They want to find out whether using the ultrasound system is cheaper for the crab fishermen than having underpaid Moroccan women peel the crabs. To do this, they are collecting data on the machine, such as material costs and peeling volume, as well as a lot of information about the crab fishermen's work processes and costs.
The principle works! That much we can say.
Arne Schröder, graduate biologist at the Thünen Institute
How should the machine work?
Ultrasonic shock waves dissolve the calcium deposits in the shell, explains Schröder. This causes the shells to break open. Compressed air then removes the shell. One problem is that the shells are of varying thickness. The machine is designed to remove the shells from the flesh as gently and completely as possible. It may be that further work will be necessary later, says Schröder.
A young woman in a business outfit and glasses looks into the camera.
Christin Klever had the idea for the ultrasound machine. Image: US Processing Klever UG
Where does the idea come from?
The ultrasound method is Christin Klever's idea. For her final thesis in mechanical engineering, the East Frisian examined crab shells for their consistency. The idea came from her professor, who was surprised that crabs were taken to Morocco to be peeled. After that, she began to design machines for the food industry full-time. Privately, however, she continued to research the crab project. At some point she came up with the idea that the shells contain lime and that lime can be destroyed using ultrasound.
Together with her father, who used to be a crab fisherman himself, she then founded a company. And now both are involved in the research project led by the Thünen Institute. According to Schröder, her company has developed "a preliminary stage of the machine". However, it is secret, says Schröder, and patent proceedings are currently underway.
Who else is involved in the project?
In addition to the Thünen Institute and the company US-Processing Klever UG, the University of Göttingen is also involved, which is investigating, among other things, how the crab meat can be marketed in other ways. "If we use the machine regionally and market the crabs as a regional product, what is the point? Perhaps customers will be prepared to pay more for a regional product," says Schröder. Then a crab sandwich would end up being more expensive than before, but at least it would be a regional product. In addition, the proportion of preservatives could be reduced if the crabs no longer had to be sent on the long journey to Morocco.
The Technology Transfer Center (TTZ) in Bremerhaven is currently investigating whether the peeling residues can be used sensibly. The chitin contained in the shell, for example, is a sought-after substance in the cosmetics industry, says Schröder. And disposal of the residues ultimately costs money. In addition, the Thünen Institute commissions external experts for individual issues.
A man stands on a cutter holding a sieve with crabs in his hand.
Will the machine be worth it for the fishermen? Image: dpa | Ingo -
TaraDeS — 1 year ago(June 02, 2024 03:45 AM)
by Joc Spader June 02, 2024 01:46 AM
Member since July 2, 2018
Hey Tara. Chrome translated the entire article into English. The word crab in talked about instead of shrimps? They are mentioned towards the end tho. I'm going to buy some of this on Monday.
Shrimps = Krabben
Crab = Krebs
Most translators don't understand that little difference.
"Krebs"
also means cancer.
It would be a sensation if this machine in development could
"peel"
(cure) cancer!
If you look closely, the cover photo shows, what the article is about.
Shrimps
I like those plastic soup cups too…and will never admit it.
Real junk food!
This is what I call my lunch
"Chemiebaukasten"
(chemistry set/kit).
Spoiled by North Sea shrimps, I prefer this variety:
Haute Cuisine within 3 minutes! -
TaraDeS — 1 year ago(June 02, 2024 04:44 PM)
by ∂³∑x² June 02, 2024 06:17 PM
Member since May 7, 2024
Similar to the Swahili word "Kuku" Tara
Lots of words sounds similar across the world. It's all part of that Proto-Indo-European (PIE) I was telling you about in another thread
And (African) Swahili for noodles is
"noodles"
, Juanita.
You als said that
"Rome fell by Germany's hand"
. -
∂³∑x² — 1 year ago(June 02, 2024 05:08 PM)
Good luck getting noodles outside of the very few cities were Kiswahili is spoken to go with your kachumbari Tara
East Africa really was Germany's thing about 100 or so years ago
However, unlike Rome it was the Brits who protected it before giving the territories their independence
It's a cool history Tara, you might want to look into it
Call me ∑ -
TaraDeS — 1 year ago(June 02, 2024 05:36 PM)
by ∂³∑x² June 02, 2024 07:08 PM
Member since May 7, 2024
Good luck getting noodles outside of the very few cities were Kiswahili is spoken to go with your kachumbari Tara
East Africa really was Germany's thing about 100 or so years ago
However, unlike Rome it was the
Brits
who
protected
it before
giving
the territories
their independence
It's a cool history Tara, you might want to look into it
…that made my day.
The brave Brits
"protected"
their colonies.
And then the generous Brits gave them (voluntarily!) their freedom, hahahaha.
The World according to Juanita.
"German East Africa"
wasn't the entire East coast, it's today Tanzania.
You might want to look at the map. -
∂³∑x² — 1 year ago(June 02, 2024 05:47 PM)
"German East Africa" wasn't the entire East coast, it's today Tanzania.
You might want to look at the map.
I know Tara, I've been there
I didn't just look it up. I've touched the tiny shackles that Germans used on the few Tanzanians they didn't kill, but enslaved. You should visit Bagamoyo, that was the main German slave camp used to ship those stolen from their villages across to Zanzibar before having those poor souls scattered across the Middle East and Asia
Until the Brits declared slavery illegal and spent a fortune stopping German, and other countries', ships from being in those waters.
Do you want to know how the number of large tribes in Tanzania dwindled to to the big three that exist just now? I'll give you a clue and it rhymes with shyzer
There's a door in Bagamoyo which heralded the dead body of the man reporting on all of the atrocities across a large region from Central to East Africa back to London were it was published in a large national newspaper tilting public sentiment towards how people were being treated there. You have heard of Doctor Livingston, I presume
Call me ∑ -
TaraDeS — 1 year ago(June 02, 2024 05:54 PM)
by ∂³∑x² June 02, 2024 07:47 PM
Member since May 7, 2024
I know Tara, I've been there
I didn't just look it up. I've touched the tiny shackles that Germans used on the few Tanzanians they didn't kill, but enslaved. You should visit Bagamoyo, that was the main German slave camp used to ship those stolen from their villages across to Zanzibar before having those poor souls scattered across the Middle East and Asia
Until the Brits declared slavery illegal and spent a fortune stopping German, and other countries', ships from being in those waters.
Do you want to know how the number of large tribes in Tanzania dwindled to to the big three that exist just now? I'll give you a clue and it rhymes with shyzer
There's a door in Bagamoyo which heralded the dead body of the man reporting on all of the atrocities across a large region from Central to East Africa back to London were it was published in a large national newspaper tilting public sentiment towards how people were being treated there. You have heard of Doctor Livingston, I presume
Blablabla…tl;dr
I'm tired of your arrogant
fiction novels
full of (historical) mistakes.
And your lack of punctuation.
Have a good one, Juanita.
️ Christina 1986-05-20 
..?
Schrodinger's Cat walks into a bar, and doesn't. 
