red lobster to be sold by darden
The publicly traded company known as Darden Restaurants owns notable restaurants such as Red Lobster, Olive Gardens, and Longhorn Steakhouse. However, since the time of the 2008 banking crisis, full-service restaurant chains have struggled to remain profitable. In the case of Darden Restaurants, it is believed that their two biggest revenue generating venues Red Lobster and Olive Garden are in decline.
If so that would explain the reason why the company is looking to sell Red Lobster or possibly spin off its 705 locations. It is also being reported that no additional Olive Garden restaurants will be opened and that plans to expand Longhorn Steakhouse venues will be limited.
For the year ending 2013, Darden Restaurants reported sales of $2.6 billion, but their signature three restaurants has been under-performing. There is speculation that the three restaurants might actually be losing money and that any profit Darden Restaurants is reporting is coming from smaller restaurants.
It is also reported that Barington Capital Group has bought a stake in Darden’s shares. Barington is rumored to be eyeing a three-way split for the company where one company would contain the restaurants and another real estate. It is not clear what the third one would focus on.
Source material:
red lobster to be sold by darden
http://www.digitaljournal.com/biz/business/why-red-lobster-is-being-sold/article/364346
Recent Comments