There is an old saying that if a restaurant survives its first two years in business, then smoother sailing is ahead. However this is obviously not the case with Red Lobster. The chain has been a Darden hallmark since 1968, and has managed to stay afloat for almost five decades. Unfortunately times have changed. People can no longer go out and spend $50 on dinner for two. People who have dined at Red Lobster will readily admit that this is one of the pricier restaurants, so it makes sense that higher end restaurants would be the ones who would be at the greatest risk.
This is not the first time that Red Lobster faced its own demise. Last fall a rumor began floating around that the restaurant chain was shutting its doors permanently. That rumor proved false, but it did alert the public to the crisis that the restaurant chain was facing. Aside from the closing of a Red Lobster/Olive Garden Hybrid in Thomasville, Georgia, earlier this month, there have been no other closings within the chain.
So what will happen to Red Lobster? Darden had been fishing for potential buyers, and caught one in the form of Golden Gate Capital. This investment firm already owns the California chain, Pizza Kitchen, and seems eager to try their hands at seafood. According to a press release issued by Darden, Golden Gate Capital will acquire the chain for $1.6 billion. This will include all assets and assumed liabilities. The transaction is expected to be completed by the first fiscal quarter of 2015.
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