Red Lobster CEO resigns

Red Lobster CEO Kelli Valade is resigning after just eight months at the helm of the Orlando-based seafood chain, a quick departure that one industry analyst called "very, very, very bad." A news release announcing Valade's resignation did not give a specific reason for her departure, which she called "an incredibly difficult, but necessary, decision." It is effective April 15. "We've accomplished a lot in a short period of time, including building a great leadership team that alongside the board will carry the business forward to achieve our vision," Valade said in the release. Valade took over as CEO in August after the retirement of the brand's longtime leader Kim Lopdrup. San Diego-based restaurant analyst John Gordon called the resignation "very, very, very bad." "No CEO anywhere wants to be on board a company only eight months. That says it all," Gordon said. "That is an indicator of severe stress and malfunction that you can only stay on a job eight months before some sort of irreparable break occurs." Prior to joining Red Lobster, Valade had been president and CEO of Black Box Intelligence since 2019 and before that she spent more than 22 years at Brinker International, including as brand president for Chili's Grill & Bar. "Kelli has a very sound, very, very strong reputation in the restaurant industry as a leader and in casual dining in particular through her experience coming up through the ranks in Brinker, which of course has both Chili's and Maggiano's," Gordon said. Gordon said the resignation is a bad signal to future CEOs for Red Lobster. He added everything becomes uncertain at a company following the departure of a CEO. "This kind of causes a shiver of ice to go through the management ranks," Gordon said. Those management ranks have been changing in recent months, with David Schmidt revealed as the company's new chief financial officer on March 14, Cijoy Olickal as chief information officer on March 28 and Patty Trevino as chief marketing officer on Jan. 18. When a tenure is as short as Valade's time at Red Lobster, it could be a mismatch in what was expected either by the executive or by the board from what the situation actually is, said Ron Piccolo, chair of the University of Central Florida's department of management. "It would tell me it's probably not a great culture to be in or the financial operating circumstance is challenging more so than it might appear on the surface," Piccolo said. "Why so abrupt? It's not known whose choice it is to break the relationship." He added it was unfortunate this would happen at a brand so important to Central Florida.Red Lobster board member Paul Kenny is expected to be a "liaison" between the company's leadership and board during the transition, and a search for a replacement is expected to begin immediately, the release said. "On behalf of the Board, we thank Kelli for her service and accomplishments during her tenure as CEO, including navigating through the most recent wave of the COVID-19 pandemic," said Rittirong Boonmechote, chairman of the Red Lobster Board of Directors, in the release. "She has helped us assemble a talented and highly capable leadership team to lead us forward. We wish Kelli the very best in the future." In 2020, seafood supplier and Red Lobster stakeholder Thai Union and a group of investors acquired the rest of the seafood restaurant company from private equity firm Golden Gate Capital. Thai Union has its headquarters in Thailand and its seafood brands include Chicken of the Sea, John West, King Oscar and others. The investor group that was part of the acquisition included key shareholders Kenny, the former CEO of Asia's Minor Food, and Rit Thirakomen, CEO and controlling shareholder of Thai chain MK Restaurant Group. That sale came following concerns from outside analysts over a loan reaching maturity and while the coronavirus pandemic crippled much of the restaurant industry. Red Lobster, which has more than 700 restaurants, completed refinancing that debt last year. Before that refinancing and sale, the loan had more than $355 million outstanding as of a June 2020 report from Moody's. Red Lobster's operations "recovered significantly" in the fourth quarter of 2021, but saw a challenging start to 2022 with the omicron variant of coronavirus and higher costs, according to a presentation from Thai Union.