Red Lobster Closing Rumors Fought Off by Darden Restaurants

Friday, 27 Dec 2013 01:37 PM

By Clyde Hughes

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
Darden Restaurants Inc. is fighting off rumors that its Red Lobster chain is closing after the company announced it planned to sell or spin off the seafood eatery.

Rich Jeffers, Darden's director of media relations, told the News-Herald in Southgate, Mich., that the company never said it was closing the restaurant and wants to reassure customers.

Jeffers told the newspaper that Red Lobster transaction would "simply be a change in ownership."

Urgent: Do You Approve Or Disapprove of President Obama's Job Performance? Vote Now in Urgent Poll

Darden announced earlier this month, after pressure from a handful of investors, plans to sell its biggest asset in a move to improve stock prices, according to The New York Times. The company plans to sell Red Lobster through a tax-free spinoff to shareholders, but would be interested in a sale.

Darden is one of the country's giants in casual dining industry, with a market value of $6.7 billion, according to the Times.

The Los Angeles Times reported that Red Lobster has 705 locations in the U.S. and Canada. Former Red Lobster executive Kim Lopdrup will return as its chief executive once it is sold or spun off.

Red Lobster's foot traffic compared with the same period in 2012, though, had fallen 7.3 percent last month, 9.9 percent in October and 5.8 percent in September.

Editor's Note: ObamaCare Is Here. Are You Prepared?

At the time that Darden announced it was selling Red Lobster, it also noted that it would stop opening new Olive Garden locations while scaling back growth in its LongHorn Steakhouse chain.

"Our industry is in a period of significant change, with relatively low levels of consumer demand in each of the past several years for restaurants generally, and for casual dining in particular," Clarence Otis, Darden's chief executive in a statement.

Fox Business reported that the hedge fund Barington, which owns more than 2 percent of Darden, led the charge for the company to part ways with Red Lobster.

Barington CEO James Mitarotonda called the Red Lobster move "a first step toward improving focus and operating execution." He told Fox Business that it the move "fails to address significant additional opportunities to enhance long-term shareholder value."

Related Stories:

© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Send me more news as it happens.
 
 
Get me on The Wire
Send me more news as it happens.
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
You May Also Like

Cambodia HIV Outbreak: 100-Plus People Diagnosed; Investigation Sought

Friday, 19 Dec 2014 18:50 PM

More than 100 HIV infections in a single Cambodian village have spurred the country's prime minister to ask for an inves . . .

Slender Man Case: Two Girls Competent to Stand Trial in Stabbing

Friday, 19 Dec 2014 18:26 PM

Two girls who allegedly stabbed a 12-year-old friend over the online game Slender Man are competent to stand trial for a . . .

Kate Upton Sexiest Woman Alive; Model Apologizes to Teen Brother

Friday, 19 Dec 2014 17:52 PM

Model Kate Upton was selected as People magazine's first Sexiest Woman Alive, a month after Chris Hemsworth received the . . .

Top Stories

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved