As was foretold back in December, Darden Restaurants is chucking its catch back into the sea, and getting a nice chunk of change for it: The company announced that it’s selling seafood chain Red Lobster off to investment firm Golden Gate Capital for $2.1 billion in cash.
Red Lobster’s former parent company, which also owns Olive Garden, had said last year that it was going to try to either spin off its 705 U.S. and Canada Red Lobster locations or just sell them off outright. It seems it decided to go with the latter.
The issue lies with slow business at its chains, as they leak customers to other chains like Chipotle, which customers like for the better-than-fast-food food without having to sit down and order from a menu.
Red Lobster first opened in 1968, notes the Associated Press, and was on the forefront of the seafood cuisine movement for many Americans, who might not have dined on the cuisine otherwise. But as things started to go south, Darden tried adding non-seafood items to the menu, which didn’t really help much.
For now, it seems Darden will have enough on its plate just trying to fix Olive Garden through a so-called “brand renaissance.”
Prepare to bid Red Lobster goodbye soon enough — Darden says it expects to close the deal in its first fiscal quarter of 2015.
Darden Announces Sale of Red Lobster for $2.1B [Associated Press]
by Mary Beth Quirk via Consumerist
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