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Red Lobster closing rumors swirl amid talks of a sale or spinoff

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Red Lobster closing rumors continue to swirl as its parent company, denies rumors that seafood eatery is closing, according to a Dec. 27 report in The News-Herald. Quashing any such rumors, Darden’s director of media relations Rich Jeffers stated, “Never have we said we would be closing restaurants.”

The New York Times reports that Darden did announce that it would get rid of Red Lobster in order to boost its stock price. It planned to dispose of Red Lobster via a tax-free spinoff to its shareholders, but a sale was not out of the questions.

According to The News-Herald, such a transaction would “simply be a change in ownership.” The earliest date specified for a sale or spinoff is July 2014. The seafood chain has 705 restaurants in the U.S. and Canada, and boasts annual sales of about $2.6 billion in the company’s 2013 fiscal year, the New York Times reports.

As popular as Red Lobster is, it has significantly decreased in value to the parent company over the years. Sales are expected to decline at least four to five percent this year.

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