Unhedged
Who killed Red Lobster?
May 28, 2024
FT's Wall Street editor Sujeet Indap delves into the downfall of Red Lobster, analyzing the impact of the Endless Shrimp promotion and ownership disputes. They also explore the benefits of real estate investment trust structures for business valuation and discuss the struggles faced by Red Lobster post-split from Darden. Insightful discussions on fast-casual dining preferences and artistic admiration wrap up the podcast.
19:31
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Quick takeaways
- Ownership changes and financial mismanagement contributed to Red Lobster's downfall.
- Creating a real estate investment trust could have unlocked additional value for Red Lobster.
Deep dives
Red Lobster's Financial Troubles and Ownership Changes
The podcast delves into Red Lobster's financial struggles, tracing them back to its ownership changes from being part of Darden to becoming an independent company. It explores the impact of the Endless Shrimp promotion, costing the company $11 million, and the controversies surrounding its largest shrimp supplier, Thai Union. The narrative highlights the proxy fight between Darden's management and activist hedge fund Starboard Value, resulting in significant changes in the company's operations and value creation strategies.
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