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Pinkberry readies for growth with funding, partners

LOS ANGELES Pinkberry on Friday said it is poised for rapid expansion with a new $9 million infusion from investors, as well as the chain’s first international franchise agreement and new partnerships for domestic growth that include HMSHost.

Officials at the 73-unit frozen yogurt chain refused to offer details about the $9 million in new funds — or the company’s growth plans — except to say that the new funding comes from both current and new investors.

 

News of Pinkberry’s expansion plans comes just weeks after Red Mango, a 45-unit frozen yogurt chain based in Dallas, announced that it was ramping up its franchising efforts with a goal of opening 40 new units this year.

Early last week, a Wall Street Journal blog reported that Los Angeles-based Pinkberry in March received $5.8 million in venture capital funding as part of a round totaling $15 million.

The $9 million the company confirmed is the first known significant injection of cash since the privately held company received $27.5 million in 2007 from private-equity firm Maveron LLC, which was co-founded by Starbucks Corp. chairman Howard Schultz.

“Raising capital and forming partnerships of this caliber in the face of a tough economy are significant milestones,” said Ron Graves, Pinkberry chief executive, in a statement. “Our current as well as new investors have reiterated their confidence in Pinkberry and provided funding that will continue to fuel our growth.”

In addition, Pinkberry announced a partnership with M.H. Alshaya Co. to open 35 stores in nine countries in the Middle East, the first of the 73-unit chain’s locations to open outside of the United States.

Alshaya is a franchise retail operator of more than 45 retail brands throughout the Middle East, including restaurant concepts such as Starbucks, Le Pain Quotidien, Pizza Rustica and Noodle Factory.

Graves described the Alshaya group as “clearly the recognized leader in international, multi-unit operations with a very impressive brand portfolio.”

In addition, Pinkberry officials said they have signed an agreement with HMSHost, based in Bethesda, Md., to open locations in airports across the country. The first airport location planned is at Los Angeles International Airport, or LAX, in late summer, said Susan Goyette, a spokeswoman for HMSHost.

Goyette said the company would not reveal the number of Pinkberry locations planned or where, for competitive reasons.

It is HMSHost’s first agreement with operators of what Goyette described as “the new style of frozen yogurt,” referring to Pinkberry’s tart flavors, though HMSHost operates some TCBY locations that offer more traditional frozen yogurt.

Additional domestic expansion is planned for the San Francisco Bay area and Sacramento, following what company officials described as the success of the first Northern California unit, which the company opened in San Jose in January.

At least 30 franchised stores will be opened in those markets, though company officials would not elaborate on the agreement.

Meanwhile, a third Pinkberry location reportedly closed in the Los Angeles area last week. The shuttered unit was in the Westwood neighborhood near UCLA. Earlier this year, Pinkberry stores were closed in Brentwood and Santa Monica, Calif.

Company officials declined to comment on the reasons for the closures.

Contact Lisa Jennings at [email protected].

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