On Friday, May 16th, Darden Restaurants announced the sale of its Red Lobster chain to Golden Gate Capital, a private equity firm based in San Francisco which also owns California Pizza Kitchen, Payless, and Zale Corporation.
The $2.1 billion sale of Darden’s struggling seafood chain is expected to leave the company with roughly $1.6 billion in cash, of which $1 billion will be used to alleviate some of the company’s debt.
Darden will use the rest of the profits to buy back market shares.
Darden announced its intention to sell Red Lobster in December 2013, and will now turn its focus to Olive Garden, which has also struggled with declining sales in the last several months (a 5.4 percent drop compared to Red Lobster’s 8.8 percent drop in the first three months of 2014).
"All of the turnaround focus can be 100% on Olive Garden rather than fighting a war on multiple fronts," a source told CNN.
Karen Lo is an associate editor at The Daily Meal. Follow her on Twitter @appleplexy.