Darden Restaurants, the brand group that controls U.S. seafood chain Red Lobster, says it could either spin off the brand or sell it outright, possibly to a private equity firm. If Darden goes the private equity route it could close under-performing stores and boost prices to compete with upscale seafood brands like Bonefish Grill, but neither strategy is popular on public markets. Red Lobster competitor Captain D’s underwent a similar transformation when it was bought by Sun Capital Partners in 2011 and under-performing stores were closed.
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