Dec 27, 2013 01:36 PM EST
Red Lobster Closing: Parent Company Plans To "Spin-Off" Or Sell Seafood chain
Red Lobster, one of the world's largest sit-down seafood restaurants, may be closing up shop, the New York Times reported.
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Darden Restaurants, parent company of the chain, announced last week that it would dispose of one of its most recognizable restaurants in an effort to boost its stock price. The company plans to sell or "spin-off" its 705 Red Lobster locations, which brought in $2.6 billion in sales last year, the Daily Journal reported.
"As consumer demand dynamics have changed, Red Lobster's priorities and operating support requirements have come to differ meaningfully from those of Darden's other brands, which are having greater success increasing appeal among consumers outside their core guest profiles," the company said in a statement on Dec. 19. "As a separate company, Red Lobster will have greater freedom to pursue marketing and operating strategies that are more tailored to the needs of those consumers who fit its core guest profile."
The statement released last week by Darden restaurants implies that it is disappointed in its cornerstone restaurant, the chain that "gave it life."
According to The Times, the company's plan follows months of questions and pressure from shareholders and analysts over how it planned to bring back consumers after the recession.
"The actions we're taking are clearly exciting steps forward for Darden, and we believe these actions enhance our ability to create compelling value for our shareholders," the Times quoted Darden's Chief Executive Clarence Otis as saying during a conference call on Thursday.
A spin-off of the restaurant chain could be a less expensive dining option in the same league as restaurants like Panera Bread, the Daily Journal reported. Any company-wide decisions must be approved by Darden's board of directors.
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Darden Restaurants, one of the biggest companies in the casual dining industry, owns some of the largest restaurant brands including Olive Garden, LongHorn Steakhouse, Bahama Breeze and The Capital Grille.