Red Lobster To Be Sold For $2.1 Billion

NEW YORK (CBSMiami/AP) — The Red Lobster restaurant chain will be sold to an investment firm for $ 2.1 billion.

Darden Restaurants, based in Orlando, said they will sell the restaurant to investment firm Golden Gate Capital.

The company, which also owns Olive Garden, had announced late last year that it planned to either spin off or sell Red Lobster to improve its financial performance.

Both Olive Garden and Red Lobster have been losing customers in recent years, and the company has tried various menu changes and different marketing campaigns in hopes of winning back business.

But Darden sees more potential in fixing Olive Garden, which the company says fits with its other, smaller restaurant chains that cater to customers willing to spend more. By contrast, Darden CEO Clarence Otis said Red Lobster has been unable to capture higher-income customers.

Investors have nevertheless challenged Darden’s plans to sell only Red Lobster, saying that the company should separate Olive Garden and Red Lobster as a pair from the more successful smaller chains, which include Longhorn Steakhouse and Capital Grille.

There are about 700 Red Lobster locations and 830 Olive Gardens in North America.

Shares of Darden slipped 1 percent to $50.10 in premarket trading.

TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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