R.I.P. Red Lobster. The seafood restaurant chain is reportedly closing up shop.
Darden Restaurants announced Thursday (Dec. 19) that Red Lobster locations will be shutting down for “a tax-free spin-off” or possibly be sell it off completely. One thing is for sure, though: no more Red Lobster.
Apparently, investors and analysts have pressured Darden about its future and how it planned to bring back consumers after the recession. Though it’s one of the biggest companies in the casual dining industry, with a market value of $6.7 billion, its core chains — Red Lobster being its first — have had stagnant growth.
Red Lobster has 705 restaurants in the U.S. and Canada, and had annual sales of about $2.6 billion in the company’s 2013 fiscal year.
It’s unclear when the locations would begin closing at press time.
In addition to Red Lobster’s closure, Darden also plans to halt expansion at its core Olive Garden chain, and slowing down opening new locations for LongHorn Steakhouse.
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.