Darden Restaurant Group is pushing ahead with its separation plan from Red Lobster and goals to re-focus and re-enable both sides to become more creative following an announcement Monday the company said in a press release. Changes are also being made at Olive Garden.
The division calls for Darden to offshoot the franchise seafood restaurant chain to investors through a tax-free process or market the company for a potential purchase.
Red Lobster is then expected to focus on improving food selection, the foods tastes, how much desire there is for a food product, restaurant operations, menu prices, and gearing the restaurant's brand to the most common customer the press release reported.
"The Olive Garden brand renaissance is underway, and we are driving profitable growth at LongHorn Steakhouse and the Specialty Restaurant Group. At Red Lobster, we are on track with the separation plan," Clarence Otis, chairman and CEO at Darden said in a statement. "That plan includes a process in which we are exploring the potential sale of the business, as well as a parallel process to spin the business off. Red Lobster is implementing initiatives that will improve results for the balance of the year and support the brand's success on a standalone basis," Otis said in a statement.
"Our actions to drive efficiencies across the organization are resulting in meaningful savings, with more to come. And Darden's strong cash flows are continuing to support significant return of capital to shareholders," Otis said in the statement. "Notwithstanding the changing dynamics and challenges in our industry, we have a strong foundation in place. We look forward to talking directly with Darden shareholders and the investment community to provide further insight about our plans and initiatives to drive shareholder value," Otis said in the statement.
Darden announced Dec. 19, that they are making Red Lobster its own separate entity Forbes reported.
The new arrangement will put Red Lobster's 705 restaurants alone from Darden, which has not done well for the company. The organization also has Olive Garden, LongHorn Steakhouse, Bahama Breeze Capital Grille, and Seasons 52 Forbes reported.
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.
