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How private equity rolled Red Lobster
When a private-equity firm bought the iconic seafood chain in 2014, it sold the real estate under the restaurants for $1.5 billion. Then the restaurants struggled to pay the rents.
“Red Lobster is an exceptionally strong brand with an unparalleled market position in seafood casual dining,” Josh Olshansky, managing director at Golden Gate, said at the time, a press release announcing the deal shows. As is typical in private-equity buyouts, Golden Gate’s purchase of Red Lobster significantly increased the chain’s debt, adding higher interest costs to its burden. “One of the reasons people feel so insecure is you’ve got in the background, behind the curtain, a lot of these financial games that ultimately are making the very rich richer, and hurting America’s working and middle class,” Reich said in an interview.
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