Top company by employee – 65 – Darden Restaurants – Florida US
Industry: Hospitality – Food and Beverage Service
Ownership: Publicly quoted/held
Previous rank: 99
2011 revenue ($ millions): $7,500
What makes it so great?
The parent of Red Lobster, Olive Garden, and six other restaurant chains employs 135,000 part-timers, who are eligible for low-cost health insurance.
|Traded as||NYSE: DRI
S&P 500 Component
|Predecessor(s)||Red Lobster Inns of America
General Mills Restaurants
|Headquarters||1000 Darden Center Drive
Orlando, Florida, U.S. 32837
|Number of locations||1,900 (May 2012)|
|Key people||Clarence Otis, Jr. (CEO,Chairman)
Andrew H. Madsen (COO,President)
|Revenue|| US$ $7.999 billion
(FY May 2012)
|Operating income|| US$ 638.0 million
|Net income||US$ 475.5 million|
|Total assets|| US$ 5.944 billion
|Total equity|| US$ 1.842 million
Darden Restaurants, Inc. is a multi-brand restaurant operator headquartered in an unincorporated area in Orange County, Florida, near Orlando. The firm owns several casual dining restaurant chains, most notably Olive Garden, LongHorn Steakhouse, and Red Lobster. Darden has 1,900 restaurant locations and more than 190,000 employees, making it the world’s largest full-service restaurant company. As of 2012, Darden is the only Fortune 500 company with its corporate headquarters in Greater Orlando.
What would come to be known as Darden Restaurants began when William (Bill) Darden founded the Red Lobster Inns of America and opened the first Red Lobster restaurant in Lakeland, Florida, in 1968. Darden chose Lakeland because he wished to see how a seafood restaurant would fare in a non-coastal region, and Lakeland was the innermost city in Florida. The initial Red Lobster franchise was applauded by diners and critics alike. The store became successful and by 1970 had expanded to three locations in the state with two more under construction. While the locations were profitable, the company lacked the resources to expand further, so Darden sold the company to food giant General Mills that year.
General Mills ownership
General Mills upgraded the chain to a more casual dining/family fare oriented format, opened a new company headquarters in Orlando and retained Darden as company manager. In 1975, when Darden was promoted to the position of Vice President at General Mills, Joseph (Joe) R. Lee, the company’s first restaurant manager, was made President of Red Lobster. Under General Mills, Red Lobster grew into a chain of almost 400 locations by 1985. The company underwent several restructurings and transformed itself from an inexpensive fast-food seller into a chain of casual dining seafood restaurants by 1988.
One of the company’s first ventures into the diversification of its portfolio was the York Steak House chain of English-themed steak and chop restaurants in the 1970s. The franchised steak and potatoes restaurant was a cafeteria-style restaurant with salad bar and hot station. By the end of the 1980s, the chain had been mostly closed down. However some independent locations still exist.
In 1982, Darden opened the first Olive Garden concept store in Orlando. The chain took off, and by 1989 General Mills had opened over 145 stores, making the chain the fastest-growing unit in the company’s restaurant holdings. While Olive Garden did not meet critical success, it was popular, and its per-store sales soon grew to match those of Red Lobster. The company eventually became the largest chain of Italian-themed full-service restaurants in the U.S.
In 1990, China Coast was launched as an attempt to create a (U.S.) national casual dining restaurant that featured American Chinese cuisine. While the chain eventually expanded to some 50 restaurants, its sales were lackluster and lost an estimated $20 million USD. By the end of 1995, the company was shuttered, and the remaining locations were either converted to Red Lobsters or Olive Gardens or closed altogether.
In 1995, General Mills decided to spin off its restaurant chains to focus on consumer food products. The new company was named Darden Restaurants, after Red Lobster’s founder. General Mills stockholders received one share of Darden for every common share of General Mills held. General Mills restaurants had $108 million net income in that year. At the end of 1995, Darden operated 1,250 restaurants in 49 states with 73 locations in Canada.
Darden Restaurants was spun off from General Mills beginning on May 9, 1995, when it began trading on when-issue basis at $9.75 a share. The company became a fully separate entity on May 31, 1995, when its shares went on sale on the NYSE. The shares opened at $10.75, 17% below expectations, but climbed to $11.125 by the close of trading.
Darden executives planned to have two additional chains in place by 1998. In March 1996, Darden launched a test of Bahama Breeze Caribbean Grille concept featuring food and drinks found in the islands of the Caribbean Sea and a Caribbean theme, was created in 1996.
Markets were over saturated with restaurants in 1997 forcing Darden to close 48 poor performing locations and lose $91 million due to the restructuring. Red Lobster and Olive Garden were given make overs in 1998. Darden also made a profit of $102 million that year.
1999 saw Darden opening additional location after recovering from the 1996-1997 losses. The company then began testing a new concept entitled Smokey Bones BBQ Sports Bar that opened in late 1999 in Orlando. The restaurant is a sports bar concept featuring barbecue and related foodstuffs in an Appalachian mountain-lodge setting.
In 2003, Seasons 52 was under development with the idea of “provide guests the opportunity to indulge while still eating well." Season 52 were only being opened in the Florida or Atlanta markets during its initial phase.
Darden announced in January 2007 that the company was willing to expanded by purchasing an existing 100 location chains even considering franchisors. By May, Darden indicated that its Smokey Bones division would be sold and or shut down including the two Rocky River Grillhouse, the proposed replacement concept for Smokey Bones. In August, Darden acquired rival Atlanta-based restaurant holder Rare Hospitality for $1.4 billion USD, gaining Rare’s two chains, the The Capital Grille and LongHorn Steakhouse. As part of the Rare acquision, Darden set up its Specialty Restaurant Group to include Capital Grille, Bahama Breeze and Seasons 52. In December, Darden announced that it would sell its Smokey Bones chain to Barbeque Integrated, Inc., an affiliate of Sun Capital Partners, Inc., for approximately $80 million. The sale was completed in January, 2008.
In 2010, Seasons 52 started a new expansion phase opening up in 11 more states over the next three years.
In January 2011, Darden announced co-locating their Olive Garden and Red Lobster brands in smaller markets to share kitchen but continue separate menus and eating areas.As part of the February Darden analyst conference, an analyst indicated that the corporation may be targeting another resaurant chain for acquision possibly one of BJ’s, California Pizza Kitchen or Yard House. In October 2011, Darden acquired 2 chains, Eddie V’s Prime Seafood and Wildfish Seafood Grille, for $59 million cash transaction and were placed within its Specialty Restaurant Group, Also In October, Darden signed an area-development agreement with Americana Group of Kuwait to develop and operate at least 60 locations using the Red Lobster, Olive Garden and LongHorn Steakhouse concepts.
In July 2012, Darden acquired the Yard House 39 location beer-centric chain for $585 million from TSG Consumer Partners. Yard House will be alongside the other upscale restaurants in Darden’s Specialty Restaurant Group.