by Gordon Gilbert
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| Angry that your favorite Red Lobster closed down? Wall Street wizardry had a lot to do with it. Assigning blame for company failures is tricky. But some analysts say the root of Red Lobster’s woes was not the endless shrimp promotions that some have blamed. (See The New Verse News, June 1.) Yes, the company lost $11 million from the shrimp escapade, its bankruptcy filing shows, and suffered from inflation and higher labor costs. But a bigger culprit in the company’s problems is a financing technique favored by a powerful force in the financial industry known as private equity. —NBC News, May 25, 2024 |
It was not the little shrimp alone
that took their giant lobster cousin down.
Oh no!
Red Lobster was the victim of a larger predator.
Private equity’s the one to blame.
Oh yes!
Golden Gate Capital it was
that stripped Red Lobster of its hard-shell assets,
its molting soft-shell vulnerable to any and to all.
In the end, the little shrimp were just the last and latest,
all it took to do Red Lobster in.
So let’s not blame it on the shrimp!
Leveraged buyouts often do drive corporate defaults.
Private equity's a graveyard where
too many good companies go to die:
Sears, Mervyn’s, Shopco, other retail chains;
Steward Healthcare, Manor Care
and other hospitals and nursing homes;
and now, most recently, another food chain:
Red Lobster.
Senator Edward Markey says beware!
Already they are coming for your healthcare!
Gordon Gilbert is a writer living in NYC's west village. During the pandemic, he often found solace and an inner sense of peace by taking walks along the nearby Hudson River.
