Darden announces sale of Red Lobster for $2.1B
Darden Restaurants said it will sell its Red Lobster chain to investment firm Golden Gate Capital in a $2.1 billion cash deal.
Darden, which also owns Olive Garden, announced last year that it planned to spin off or sell Red Lobster to improve its financial performance.
Olive Garden and Red Lobster have been losing customers in recent years. Part of the problem is the growing popularity of fast-casual chains such as Chipotle, where customers don't have to pay as much or wait for table service.
Red Lobster, which opened in 1968, helped popularize seafood among Americans. The first location in Lakeland, Fla., boasted platters that included frog legs and hush puppies for $2.50.
As the chain suffered sales declines more recently, Darden expanded its menu to include more non-seafood dishes in a bid to attract a wider array of customers. The efforts didn't take hold.
Darden CEO Clarence Otis has noted that Red Lobster has been unable to capture higher-income customers.