Darden to close all Olive Garden, Red Lobster combo restaurants

Darden Restaurants (NYSE: DRI) will be closing all of its combination Olive Garden and Red Lobster restaurants, as the company moves forward with plans to spin off or sell the Red Lobster brand.

The combination restaurants were launched three years ago in smaller markets throughout Georgia, South Carolina, North Carolina and Florida. There were six locations built, each with separate entrances and dining rooms, but shared kitchen, bar space and bathrooms. Two of the combination restaurants were closed last week and the four other locations will be converted into stand-alone Olive Gardens.

Roughly 200 employees will be affected by the closures, but the company has offered staffers jobs at other Darden restaurants nearby.

Darden in December announced plans to either spin off or sell Red Lobster, one of its oldest and biggest brands, as the company faces plummeting profits and Americans dine out less frequently. The Orlando-based company also said it plans to stop building new Olive Gardens and to slow down growth at LongHorn Steakhouse.

With 705 restaurants in the United States and Canada, Red Lobster is the nation's largest sit-down seafood dining chain. Sales last year were about $2.6 billion, but the current quarter saw same-restaurant sales decline, with revenue down by 4.5 percent. Same-restaurant sales fell 0.6 percent at Olive Garden, the company's biggest chain by revenue, while LongHorn reported 5 percent higher same-restaurant sales. Those three chains combined posted a same-restaurant sales decline of 1 percent.

For more:
-See this Nation's Restaurant News article

Related stories:
Darden to spin off or sell Red Lobster as profits plummet
Activist Investor: Darden Restaurants should split into two companies
Consumers to eat out less in 2014; restaurant performance down
Home and car sales take a bite out of restaurants (and retail)
A better economy thrusts restaurants into ultra-hiring mode

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