Food News

Darden Buys Yard House Restaurants for $585 Million

As if restaurant giant Darden needed any more popular eateries in its catalogue, the good folks at the world's largest full-service restaurant group have just agreed to purchase  Yard House Restaurants, including four in the South Florida area for a steep $585 million. It adds the locations to a catalogue that already includes nearly 2,000 restaurants and $8 billion in sales.

"We have a lengthy track record of creating and growing enduring brands. As Fast Company pointed out in its July/August 2009 issue, we've truly become the full-service dining company that feeds America," said a statement on the company's website.

The purchase involves restaurants across the country. Locally, it includes locations at the Gardens in Palm Beach Gardens; Mizner Park in Boca

Raton; Hallandale Beach in Broward County; and Coral Gables in

Miami-Dade County.

The Yardhouse provides an opportunity for expansion. Darden

has done this well with its brands, Olive Garden, Red Lobster and LonghHorn Steakhouse. The aforementioned restaurant chains (except LongHorn), however, have not

been performing to expectations, each losing sales by several percent

over the last year compared to the prior fiscal year. Higher specialty

Darden names like Capital Grille and Bahama Breeze, however, have been steadily growing in sales.

"Yard House gives Darden greater exposure to both younger and

more-financially resilient customers," Darden chief cxecutive Clarence Otis

said during a conference call Thursday night, eluding to Red Lobsters and Olive Garden's recent struggles..

Yard House is known for its large selection of beers from around the world on tap, but also features a large 130-item menu centering around traditional American cuisine.

According to financial analysts, the purchase will likely be financed

with debt, and Yard House will only add marginal incremental profits; it could weaken Darden's credit ratios. Ratings on

Darden reflect the view of its business risk as "satisfactory" by

Standard & Poor. The firm has been hurt by its performance relative to industry

peers, but has boosted by its staring market share in a very fragmented


Follow Short Order on Facebook and Twitter @Short_Order.

KEEP MIAMI NEW TIMES FREE... Since we started Miami New Times, it has been defined as the free, independent voice of Miami, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Kareem Shaker
Contact: Kareem Shaker