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I'm looking more at the period where Darden Foods was replaced by The Union Group staring with a partial stake in 2016 to full control in 2020. Thai Union Group

I'm looking more at the period where Darden Foods was replaced by The Union Group staring with a partial stake in 2016 to full control in 2020. Thai Union Group is a Thailand-based producer of seafood-based food products. > On May 12, 2014, Darden announced that as part of the spinoff of Red Lobster, it was converting the co-located Red Lobster and Olive Garden locations into standalone Olive Garden locations.[31] On May 16, 2014, Darden announced that it would be selling the Red Lobster seafood restaurant chain to Golden Gate Capital for US$2.1 billion.[32] Darden announced the completion of the sale of Red Lobster on July 28, 2014 So, the divesting by the original owners and founders started around 2014. General Mills kept Darden in charge until his death in 1994. The Union Group effectively burned 2.1 billion in value in 10 years.

jeffwask 2y ago
I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated rent. It was how they financed the 2014 acquisition by spinning all the real estate assets to a separate entity per Forbes. Straight up corporate cannibalism. So Golden Gate Capital gutted it, dumped it, and then jacked up the rent... Gordon Gecko would be proud.
- danans 2y ago
  > I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated rent. How can they decide how much rent to charge if they no longer own the land? Do they just act as a property manager between the new landowner and the the restaurant? > So Golden Gate Capital gutted it, dumped it, and then jacked up the rent... Gordon Gecko would be proud. I can totally see that happening, but I'd argue they wouldn't have done it to a strong brand, which has a lot of value. Red Lobster wasn't a strong brand. If the brand were strong it wouldn't have been sold in the first place. PE and hedge funds look for weak businesses that they can then gut. They have a lot of leverage in those situations. I doubt the hedge funds lost money on the bankruptcy.
danans 2y ago
> The Union Group effectively burned 2.1 billion in value in 10 years. Perhaps, but it's also possible that the value was already burning, because the brand itself has lost any caché and the final series of owners accelerated it's demise. I remember when the brand has a lot of positive recognition 30+ years ago, and then when it became the subject of jokes, and that happened well before those acquisitions.

jeffwask 2y ago

I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated rent. It was how they financed the 2014 acquisition by spinning all the real estate assets to a separate entity per Forbes. Straight up corporate cannibalism. So Golden Gate Capital gutted it, dumped it, and then jacked up the rent... Gordon Gecko would be proud.

danans 2y ago
> I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated rent. How can they decide how much rent to charge if they no longer own the land? Do they just act as a property manager between the new landowner and the the restaurant? > So Golden Gate Capital gutted it, dumped it, and then jacked up the rent... Gordon Gecko would be proud. I can totally see that happening, but I'd argue they wouldn't have done it to a strong brand, which has a lot of value. Red Lobster wasn't a strong brand. If the brand were strong it wouldn't have been sold in the first place. PE and hedge funds look for weak businesses that they can then gut. They have a lot of leverage in those situations. I doubt the hedge funds lost money on the bankruptcy.

danans 2y ago

> The Union Group effectively burned 2.1 billion in value in 10 years. Perhaps, but it's also possible that the value was already burning, because the brand itself has lost any caché and the final series of owners accelerated it's demise. I remember when the brand has a lot of positive recognition 30+ years ago, and then when it became the subject of jokes, and that happened well before those acquisitions.