The parent of Irvine-based Yard House USA Inc. will spin off its Red Lobster chain as part of a plan to cut costs and “enhance shareholder value.”
Florida-based Darden Restaurants Inc. has faced increasing pressure from activist investor Barington Capital Group LP, which said it represents a group of shareholders with a more than 2% stake in Darden.
The New York investment firm has
called for the split of Red Lobster and Olive Garden from higher-growth-potential restaurants, such as Yard House and The Capital Grille.
Darden said in its announcement that it will spin off only Red Lobster and consider a sale. It also said it would halt growth of Olive Garden while slowing growth of LongHorn Steakhouse and its Specialty Restaurant Group, of which Yard House is a part.
Same-store sales at Yard House, which has 48 restaurants, increased 1.2% in the quarter ended Nov. 24.
―Kari Hamanaka
