Red Lobster is headed into a private equity turnaround. Darden Restaurants said it would sell the seafood chain for $2.1 billion, jettisoning a dented brand that was beset by high costs and an early-bird special demographic—not the kind of casual diners who eat out often and spend heavily on cocktails.
Darden has spent the past six months trying either to sell or to spin off Red Lobster to shareholders after company executives concluded last year that the chain was a financial albatross dragging down its more successful Olive Garden, LongHorn Steakhouse, and Bahama Breeze restaurants. Red Lobster sales have been far more volatile than its corporate siblings. The seafood chain has higher food expenses than Darden's flagship Olive Garden, which accounts for more than 40 percent of revenue.
