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.
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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.
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Where else can you go for lobster, scallops and shrimps drowned in garlic butter over rice pilaf for $25.99 now? Or Parrot Isle Jumbo Coconut Shrimp for $9.79? Or New England clam chowder in a toasted sourdough bowl and a shrimp salad for $9.99? Where else can you go to add a whole Maine lobster tail to any meal for $15.29?
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. That will give us plenty of time to imagine what the spinoff will look like (lobster burrito bowl, anyone? cheesy calamari nachos?) while we desperately search for a new fancy date place, just in case.
Editor's note: The title of this piece has been changed since its initial publication to reflect greater accuracy. The post was also amended to make it clear that there are currently no plans to shutter Red Lobster restaurants in the SoCal area; we regret any suggestion to the contrary.
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