Los Angeles, Aug 18 - Pinkberry, a frozen yogurt chain blooming in upscale neighborhoods in California and New York, plans to finish 2008 with "north of 75 stores," Chief Executive Ron Graves told Reuters on Monday.
"We expect to continue rapid growth, but we're never going to grow for the sake of growth. That's where many companies falter," said Graves, who last week became permanent CEO at the Los Angeles-based chain that boasts 60 stores and a cult following.
The chain has become a hit in Los Angeles, where its colorful stores boast modern decor and brim with fans of its tangy yogurt dressed with fresh fruit and candy.
Pinkberry founders Shelly Hwang and Young Lee have achieved celebrity status reserved for a handful of entrepreneurs and are currently being featured in an ad for American Express .
Graves was interim CEO at Pinkberry since October 2007, when the chain had almost three dozen stores and received $27.5 million in venture capital funding from Maveron, a Seattle-based venture capital firm co-founded by Starbucks Corp CEO Howard Schultz.
Graves says Pinkberry has what it takes to be a global brand, but for now is expanding in its current markets.
For example, he said, the company's newest Southern California store is in San Diego -- where Pinkberry plans to add more outlets.
Pinkberry is evaluating five or six U.S. cities and a couple of international locations, said Graves, who declined to give specifics on new markets or company financials.
Earlier this year the company disclosed the ingredients in its yogurt after settling a lawsuit -- quieting rumors that its relatively low calorie "swirly goodness" may be something other than yogurt.
Pinkberry and other upstarts are credited with reviving the "fro-yo" segment and boosting U.S. sales to $177 million in 2007 from $170 million the year earlier, according to market research firm Mintel, which expects sales to grow to $200 million by 2012.
The current boom is the biggest thing to happen in frozen yogurt since the 1980s.
The Country's Best Yogurt (TCBY) grew rapidly during that decade, but fell on hard times as consumers tastes changed. TCBY's parent Mrs Fields Famous Brands LLC filed for bankruptcy protection last week.
LITTLE CHAIN, BIG NAME
Schultz, who turned the Starbucks coffee chain into a household name, is on the board at Pinkberry and the relationship appears to go both ways: Starbucks is currently pitching its its new Tangy Sorbetto icy drink as "pinkberry inspired."
But while Starbucks, which went public in 1992, is mopping up after a building binge and paring more than 600 underperforming stores from its roster of more than 7,000 company-owned U.S. shops, Pinkberry is small, expanding -- and seeing competitors crop up by the dozen.
Chief among them is Red Mango, which last week announced $12 million in venture capital funding from Dallas-based CIC Partners and John Antioco, the former CEO of Blockbuster Inc , who also became Red Mango's chairman.
Red Mango has has 100 stores in South Korea and just over 30 in the United States.
Graves welcomes competition and doesn't think the new frozen yogurt business is a winner-take-all game.
"There's room for a few players," said Graves. "You'll see some of the one-offs come and go."