Jamba Secures $35 Million Investments, Q1 Sales Down 12.5%

Jamba Inc., a holding company that owns and franchises JAMBA JUICE stores through its wholly-owned subsidiary Jamba Juice Co., saw its total revenues fall 12.5% to $88.9 million for the first quarter of 2009 compared to the same period last year.


Perhaps a sign of the times, no new company-owned stores were opened during Q1, whereas 17 new stores were opened during the same timeframe in 2008. However, the company was able to open six new franchise stores in Q1 and could add up to 50 new franchise stores in 2009, Jamba reported May 28. As of April 21, 2009, 732 JAMBA JUICE locations were in operation, with 499 of these stores company-owned and the remaining 233 stores franchise operations.

Jamba is hoping that an effort to turn company-owned stores into more profitable franchise ventures, a process known as re-franchising, will help to pay down debt and sustain growth in the short term. “We believe that an aggressive re-franchising strategy will better position Jamba for growth and increased brand presence,” Jamba Inc. President and CEO James D. White said in a prepared statement. White went on to highlight a number of initiatives the company is working on, including a ready-to-drink (RTD) beverage re-launch with Nestle.

On June 1, just four days after releasing its Q1 financial results, Jamba announced that it had secured a $19.55 million investment from Mistral Equity Partners and another $15.45 million from the Serruya brothers, who founded the Yogen Früz frozen yogurt and smoothie chain. Jamba Inc. had previously announced a total debt balance of $23.2 million. Mistral, a private equity firm focused on the consumer and media sectors, confirmed that it had invested in Jamba convertible preferred stock. “We are very excited about Jamba and the potential growth opportunities available to the company as it extends the brand through licensing and franchising opportunities,” said Andrew Heyer, managing partner of Mistral Equity Partners. “This transaction complements our focus exclusively on investing in consumer businesses with strong management teams that capitalize on emerging demographic or psychographic trends.” Yogen Früz CEO Michael Serruya said his company would provide Jamba with insights into global franchise operations.

Jamba stock was trading at $1.09 per share on June 1, a decline of 16% from the prior week.

Related NBJ links:

Jamba Secures $25 Million in Financing
Organic To Go Receives $5 Million Investment, Shakes Up Board of Directors
Jamba, Inc. Announces Store Closings, Job Cuts

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