Sale of Red Lobster Will Pay Dividends. Literally.

The purchaser, Golden Gate Capital, also owns Payless Shoe Source and Zales. So when this sale closes in a few months, Red Lobster will be right where it belongs. Among friends.

"After tax and transaction costs Darden — which also includes Olive Garden, LongHorn Steakhouse, Bahama Breeze, Capital Grille and Seasons 52 – expects to receive about $1.6 billion in cash from the deal... The move will also allow Darden to maintain its 55 cent quarterly dividend."  You can read more in Forbes HERE. "Disappointing earnings from Red Lobster have long dragged down the 46 year old Darden and the most recent quarter was no exception. In March, Darden reported that sales for the seafood chain came in at $611 million, down 8.7% from a year earlier. Nevertheless Golden Gate Capital is optimistic, Managing Director Josh Olshansky said in a statement, 'Red Lobster is an exceptionally strong brand with an unparalleled market position in seafood casual dining.'"

But if that really is true, it's only because the rest of the segment is sinking even faster than Red Lobster. It sounds like a proverbial 'race to the bottom,' according to THIS article in QSR magazine.  "The seafood quick-service category has performed poorly in recent years... Long John Silver’s total U.S. sales dropped from $700 million in 2010 to $635 million in 2011."