Red Lobster will become separate from its former Darden Restaurant Group after Thursday Forbes reported.
The new arrangement will put Red Lobster's 705 restaurants alone from Darden, which has not done well for Darden. The organization also has Olive Garden, LongHorn Steakhouse, Bahama Breeze Capital Grille, and Seasons 52.
The group also plans to halt expansion of Olive Garden, in order to bring in more earnings for shareholders, and slash its capital spending $100 million a year. LongHorn Steakhouse is also expected to stay where it is.
Kim Lopdrup, who is presently Darden's specialty restaurant group, will shift roles and become Red Lobster's new CEO. The position is not foreign to her as she previously served from 2004 to 2011.
"While were are highly confident the future is bright for both Red Lobster and Darden, excluding Red Lobster, we also recognize that the operating priorities, capital requirements, sales and earnings growth prospects, and volatility profiles of the two parts of the business are increasingly divergent," Clarence Otis, CEO of Darden told Forbes. "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, as well as additional unexpected softness since June."
Red Lobster's income decreased 4.9 percent to $561 while sales between restaurants decreased 4.5 percent.
"Red Lobster has almost (been) forgotten as a place to eat by U.S. families as they perceive the brand as not offering the most value per plate," Brian Sozzi, chief executive of Belus Capital Advisors told Reuters.
Darden saw $2 billion in sales, a 4.6 percent increase compared to 2012's numbers. Darden's net earnings totaled $19.8 million equal to 15 cents a share.
Bill Darden established the group in 1968 with Red Lobster as the gateway to the organization's path to fame.
