Cancel Christmas! The checks have stopped coming in for Red Lobster…
According to L.A. Times reports:
In a move sure to set the culinary world and classy guys everywhere reeling, Darden has announced that it will either sell or spin off its Red Lobster restaurants.
Adding to the devastation, the company, which also runs Olive Garden and other fine-dining establishments, said it will suspend the opening of new Olive Garden locations and slow down new locations for LongHorn Steakhouses.
Why, you ask? Dear God, why??
Because Darden isn’t doing so good. It seems that consumers are turning their noses up at hoity-toity sit-down places like Red Lobster and Olive Garden these days in favor of cheaper chains like Chipotle.
Darden is one of the largest companies in the casual dining industry, with a market value of $6.7 billion, but its core chains have had stagnant growth, according to The New York Times. Last quarter the company experienced a 31 percent drop in net earnings. “The reduced unit growth will lower capital spending by at least $100 million annually,” the company said in a statement.
Red Lobster has 705 restaurants in the United States and Canada and had annual sales of $2.6 billion in 2013, but we guess that wasn’t enough for ol’ Scrooge Darden.
There is one small silver lining: The planned Red Lobster spinoff still awaits final approval from the company’s board, so it probably won’t happen until early fiscal 2015.
Red Lobster “might don’t make it” (Gucci Mane voice) — that’s it, we’re boycotting Chipotle!