Chain Leader

David Farkas

Dave’s Dispatch: On the Hook
April 9, 2007

I hear that casual-dining giant Darden Restaurants will soon acquire Cameron Mitchell's Fish Markets, as early as June or July, from a reliable source who wishes to remain anonymous. I'm told Cameron Mitchell, a Columbus, Ohio, restaurateur with a popular stable of trendy concepts, wants to unload his 17-unit namesake because his plate is full.

A catering business is taking off and he's opening a banquet hall, says the source. A one-off eatery, a small-plates Italian concept called Marcella's, debuts in Columbus in May. Mitchell, a graduate of the Culinary Institute of America, is also opening two Ocean Clubs, in Scottsdale, Ariz., this year and in Charlotte, N.C., next.

"Selling an established concept with a good reputation would give him some capital to pay down some debt and pursue other dreams," the source claims.

Darden Restaurants, meanwhile, has made no secret of wanting to boost profits through an acquisition. Red Lobster, in the midst of a makeover, has yet to spark the sales needle like counterpart Olive Garden, which has racked up 50 consecutive quarters of positive same-store sales. That has left plenty of room for profit growth. A spokesman for the Orlando, Fla.-based company declined to comment on a possible acquisition.

Presumably, the upscale Fish Markets are doing well. They're positioned to take advantage of the demand for healthful menus. That four restaurants are scheduled to open this year alone is testament to that.

Still, you'd think Darden would want to land a fish bigger than an outfit with merely 17 branches, most of which are in the recession-prone Midwest. But don't forget, it's familiar with the territory and the people; and as we've seen, Darden can grow a concept quickly if it has legs.

More importantly, this small chain delivers an affluent audience, something lower-check average Red Lobster doesn't have.

Perhaps best of all for Darden, profits could be growing at the high-volume eateries through same-store sales. Mitchell is a fine operator, after all. And while there's no way to check for sure, you've got to believe officials at Darden are not in the mood to fix yet another concept.

Posted by David Farkas on April 9, 2007 | Comments (0)