Darden Restaurants Inc. is shutting down its six combined Red Lobster and Olive Garden units as it continues to proceed with a spinoff or sale of its Red Lobster brand, the company confirmed.
Orlando, Fla.-based Darden, which also owns LongHorn Steakhouse and other casual-dining brands, closed two dual-branded units this past weekend in Thomasville, Ga., and Beaufort, S.C.
Four remaining dual-branded units will be converted to standalone Olive Gardens, said Rich Jeffers, director of communications for Darden. Those are the original “synergy” unit in Palm Coast, Fla., which debuted in March 2011, and three others in Brunswick, Ga.; Waycross, Ga.; and Wilkesboro, N.C.
“We have not put a time frame around how quickly we will convert the other four into standalone Olive Gardens,” Jeffers said in a phone interview.
Those units will be remodeled with a single entrance, unlike the current separate entrances for each brand, and the dining rooms will be converted to the Olive Garden décor.
When Darden opened the six dual-branded units, the company said they were designed for markets that don’t have population density to support a single-brand location. The units have separate dining rooms and menus, but they share a kitchen, bathrooms and a bar space.
The closure of the combined units comes amid Darden’s planned spinoff of Red Lobster, announced in December, and continued pressure from activist investors for the casual-dining company to take further steps such as separating Olive Garden and spinning off its owned properties into a real estate investment trust.
“This is all with the impending separation of Red Lobster,” Jeffers said. “We just will not be able to operate those restaurants after the separation the way they are configured today since we will no longer own Red Lobster.”
He added that the four single-brand conversions are in markets that the company says can support an Olive Garden.
As of Feb. 24, Darden owned 836 Olive Garden restaurants and 706 Red Lobster units in the United States and Canada. Darden also owns 453 LongHorn locations as well as The Capital Grille, Yard House, Bahama Breeze, Seasons 52 and Eddie V’s casual-dining brands.
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