Yum to Expand Line of Fish Restaurants

Yum Brands Inc. wants to more than double the number of Long John Silver’s seafood restaurants in the U.S., as part of an effort to expand the chain’s national presence.

It’s planning what it calls a Fish First initiative -- a build-out of stores in 33 markets to leverage the Long John Silver’s edge in the fast-fish category.

“We’d like to get it to the level of a national brand with national advertising,” Yum President and chief multibranding officer Aylwin Lewis said Wednesday during the company’s annual strategy conference for investors and analysts.

During a four-hour session, Yum Chairman and Chief Executive David Novak said rebuilding the image of Kentucky Fried Chicken was the biggest challenge the company faced. But it is the Long John Silver’s initiative that the company hopes investors will focus on when they look to the coming year.

Yum executives have said the potential of the Long John Silver’s brand surprised them after they bought Yorkshire Global Restaurants last year. They were after its sister brand, the A&W; chain, as a way to increase chicken, pizza and taco sales with a hamburger offering.

Long John Silver’s had suffered from years of debt-ridden struggle, but the brand had some things going for it, Lewis said.

With about 1,220 restaurants, it’s more than twice the size of nearest competitor Captain D’s; fish and shrimp have become more popular; and Long John Silver’s has some standing with Latino and black consumers.

There also are potential new markets. Long John Silver’s restaurants are in 36 of the 50 U.S. states.

KFC has been working on speed-of-service and other quality initiatives, Novak said, and will introduce a menu board early next year to address other problems.

Yum will have $600 million in cash flow after capital spending this year and has paid down more than half of the $4.7-billion debt from its spinoff from Pepsico Inc., Novak said, adding that “a dividend is now a possibility and is currently under review.”

Shares of Louisville, Ky.-based Yum fell 8 cents to $34.20 on the New York Stock Exchange.