Orlando, Florida-headquartered Darden Restaurants, Inc. has released a statement reaffirming the board of directors’ intention to sell or spin off its Red Lobster operation into a separate company. This followed incorrect stories last month that the franchise, which ranks as the largest seafood restaurant chain in North America with more than 700 outlets, was closing.
“To clarify, reports that Red Lobster is closing are false,” the company tweeted following a flurry of posts to and tweets to the contrary on social media sites. “We’re looking forward to your next visit!”
Now, notwithstanding criticism from some stockholders, Darden is going ahead with plans to divest the Red Lobster unit from its portfolio. On January 21 the company issued a statement, which read in part:
“While we appreciate the views of our shareholders, we have completed a comprehensive evaluation of alternatives available to enhance shareholder value, including those suggested by Starboard and others. That review included advice from financial and legal advisors that are knowledgeable on these matters, as well as input from Darden shareholders.
“Based on this review, we believe the comprehensive plan we announced in December is in the best interest of all Darden shareholders, and we are moving forward with that plan. Our plan addresses changing industry dynamics and leverages the benefits of the company’s position as the premier casual dining restaurant company. It includes separating Red Lobster, reducing new unit growth, suspending acquisitions, increasing operating support cost savings, increasing return of capital to shareholders, and refining our compensation and incentive programs.
“We are confident that these steps, together with actions we are taking to enhance guest experiences and reinvigorate demand, will lead to improved performance in our restaurants and substantially increase value for all Darden shareholders.”
Darden Restaurants, Inc, the world’s biggest full-service restaurant company, owns and operates more than 2,100 restaurants that generate over $8.5 billion in annual sales. Employing more than 200,000 people worldwide, its restaurant brands include Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s and Yard House, in addition to Red Lobster.
