A new CEO to plan bigger MaggieMoo

Bullish: MaggieMoo, a Columbia-based premium ice cream chain, names a CEO to turn it into a 1,000-store empire by 2007.

December 09, 2003|By Paul Adams | Paul Adams,SUN STAFF

The Holsteins are working overtime at MaggieMoo's International LLC, which hired a new chief executive and announced plans yesterday to expand the super-premium ice cream franchiser by more than 10-fold over the next three to four years.

Maggie Moo's, which calls its retail outlets "treateries," tapped an executive of Panera Bread to head the Columbia franchise operator as it strives to open 1,000 stores by 2007. It now has 104 stores, all but two of them owned by franchisees.

Jonathan R. Jameson, former senior vice president and chief operating officer of Denny's Restaurant Inc. and most recently senior vice president and chief brand officer at Panera, has been charged with introducing new products and capturing a larger scoop of the specialty ice cream market.

Jameson replaces franchise entrepreneur Richard J. Sharoff, the Maryland businessman who bought MaggieMoo's in 1996 and moved it from Kansas City, Mo., to Columbia. Sharoff, who remains a minority shareholder, stepped aside to make room for professional leadership.

"There was a need for someone to be able to take the company from one tier to the next," said Stuart Olsten, chairman and majority shareholder of MaggieMoo's.

Olsten, who owns about 80 percent of the privately held company's shares, recently pumped "a few million dollars" into MaggieMoo's through a private placement. The company expects to have annual sales of more than $30 million next year and hasn't ruled out taking the company public under Jameson's leadership.

At super-premium stores such as MaggieMoo's, ice cream is made fresh daily. Typically, the high-fat ice cream is rolled out onto a chilled stone slab and mixed with everything from candy to strawberries, providing a bit of theater.

Not since the frozen yogurt craze of 10 years ago has an ice cream concept enjoyed such explosive growth.

Cold Stone Creamery of Scottsdale, Ariz. leads the pursuit of market share, followed by Marble Slab Creamery of Houston and MaggieMoo's. Cold Stone had 2003 revenue of more than $150 million and expects to have 600 stores by year's end. Marble Slab expects 2003 sales of about $75 million and had about 215 stores as of this fall.

"It's the hottest-growing concept in the industry today," said Malcolm Stogo, an ice cream industry consultant in Riverdale, N.Y.

The only question among investors and industry analysts is whether the concept would go the way of frozen yogurt, which burst onto to the frozen dessert scene and quickly faded in prominence.

"It will either mature into a solid standalone concept, or they'll collapse," Stogo said.

MaggieMoo's has a tough competitor in Cold Stone, which has been aggressively expanding in the East Coast. But analysts say the huge size of the ice cream market plays to MaggieMoo's favor.

Americans spent $12.5 billion on ice cream at scoop shops and other outlets outside the home last year, according to the International Ice Cream Association in Washington. Other surveys have found that during any two-week period, 28 percent of Americans eat ice cream.

"The key number here is the size of the market," said Harry Balzer, vice president of NPD Group, a consumer marketing research firm in Port Washington, N.Y. "It's a common thing, so they're playing in something big."

"They're all pushing to open new stores," said Lynda Utterback, executive director of the National Ice Cream Retailers Association, an industry trade group. "I think certainly, as in all trends, there's going to be a shakeout somewhere down the road."

Jameson, MaggieMoo's new CEO, acknowledged that he is up against some aggressive competitors but said he isn't too worried.

"The concept definitely has legs," he said.

Olsten agreed, calling the super-premium ice cream market a niche that isn't going away.

"Am I concerned? I guess if I wasn't concerned, I'd be concerned," said MaggieMoo's biggest investor.

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