Darden to sell Red Lobster, keep Olive Garden

The company said Friday that it would sell its seafood chain and the accompanying real estate to investment firm Golden Gate Capital in a $2.1 billion cash deal.
By CANDICE CHOI, Associated Press Published: May 17, 2014
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— Darden is setting Red Lobster adrift, but betting that it can still turn around Olive Garden’s fortunes.

The company, which is based in Orlando, Fla., said Friday that it would sell its seafood chain and the accompanying real estate to investment firm Golden Gate Capital in a $2.1 billion cash deal. The announcement came despite objections from some shareholders to the plan to separate Red Lobster, which was announced late last year.

Both Olive Garden and Red Lobster have been losing customers in recent years, even as they changed their menus and marketing campaigns to win back business. Part of the problem is the growing popularity of places like Chipotle and Panera, where customers feel they can get the same quality of food without paying as much or waiting for table service.

But Darden CEO Clarence Otis has drawn a distinction between Red Lobster and Olive Garden.

Otis says Red Lobster in particular is increasingly unable to attract the higher-income customers Darden caters to with its more successful chains, which include Longhorn Steakhouse, The Capital Grille and Seasons 52.

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