May 17--Darden Restaurants Inc., the largest full-service restaurant group in the U.S., announced Friday it has agreed to sell its Red Lobster seafood chain to private equity firm Golden Gate Capital for $2.1 billion.
Watertown has a Red Lobster restaurant at 20831 Arsenal St.
Darden's sale of the 700-restaurant chain comes as it has faced competition from so-called "fast-casual" restaurants like Panera Bread and Chipotle Mexican Grill, according to a company press release. During a three-month period ending Feb. 23, sales at Red Lobster decreased from a year ago by 9.7 percent to $611 million.
In 2013, sales at Red Lobster contributed about 31 percent of total revenue for Darden, which owns Olive Garden and LongHorn Steakhouse restaurant chains.
In a statement Clarence Otis, Darden's chairman and CEO, said the sale of Red Lobster will enable the company to focus more on Olive Garden, which operates a restaurant at 20988 Salmon Run Mall Loop Road in Watertown.
Red Lobster will join an increasing portfolio of restaurants owned by Golden Gate Capital. The private-equity firm also owns California Pizza Kitchen and has invested in On the Border, a casual-dining Mexican-food chain. Josh Olshansky, managing director at Golden Gate Capital, said in a released statement that there are "significant opportunities for future growth" at Red Lobster.
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