Red Lobster restaurant chain goes on the block
Darden Restaurants said it would sell or spin off its Red Lobster business, buckling under pressure from activist investor Barington Capital Group.
Also Thursday, Darden reported a 41 percent fall in quarterly profit. Red Lobster reported a 4.5 percent fall in same-restaurant sales while sales at Olive Garden dipped 0.6 percent.
Barington wants Darden to split into two companies—one that operates its mature Olive Garden and Red Lobster chains and another that includes its higher-growth LongHorn Steakhouse, Seasons 52, Capital Grille, Yard House, Eddie V’s and Bahama Breeze restaurants.
Restaurant chains such as Olive Garden and Red Lobster have suffered since the downturn, with people being more careful about their spending. People are also increasingly heading to chains such as Chipotle, where it tends to cost less and take less time than a sit-down meal at a restaurant.