This week, the book industry is reeling dizzily under a barrage of news: the impending release of the iPad (AAPL); the headaches of moving to an agency model for e-book sales; and the roller-coaster ride of Borders' (BGP) and Barnes & Noble's (BKS) ongoing efforts to keep Ron Burkle away from the majority of their precious stock. But as all of this is happening, the country's third-largest bookstore chain is trying something completely offbeat: buying a minority stake in a two-store self-serve frozen yogurt chain.
In a statement released late Thursday, Books-A-Million (BAMM) announced that it had purchased a minority equity interest in Yogurt Mountain Holding, the parent company of Yogurt Mountain, which offers an astonishing array of flavors and toppings at stores in Birmingham and Tuscaloosa, Ala. (Alabama happens to be the home state of the bookstore chain.) Yogurt Mountain is essentially a build-your-own-sundae bar: You fill a dish precisely the way you'd like, then pay by-the-ounce, a concept that differs from other fro-yo chains such as TCBY, PinkBerry and Red Mango. Though the company didn't disclose the size or price of its stake in Yogurt Mountain in the release (and did not respond to requests for comment), clearly, it was a good enough deal for Books-A-Million to commit to a partnership.
Frozen yogurt isn't the first thing one would think of to combine with books -- not when reading marries so readily with alcohol or coffee (Books-A-Million stores already feature Joe Muggs-branded brew, which the company owns.) But coffee fever is waning: Juggernaut chains like Starbucks (SBUX), which has had longstanding partnerships with both B&N and Borders, are closing stores and cutting back. Frozen yogurt sales, on the other hand, grew 8.5% between 2005 and 2009, making its one of the fastest-growing segments in the overall yogurt industry, which reached an estimated $4.1 billion in sales last year. YoCream, a manufacturer and wholesaler of frozen desserts and beverages, reported robust first-quarter sales last month; Red Mango grossed $12 million in 2008; and according to some analysts, Pinkberry is readying itself for an IPO.
With e-book sales growing at an exponential rate, brick-and-mortar chains need all the help they can get. So if Books-A-Million figures it can make a little more money by hitching itself to the frozen yogurt bandwagon -- even in a controlled, hyperlocal manner -- it might stand a smidgen more of a chance than it did before. And who's to say that the bigger bookstores couldn't take a cue and partner with like-minded fro-yo chains -- even if, as literary critic A.N. Devers tweeted Thursday night, "there is the issue with melting, dripping, smeary pages."
Bonds for Beginners
Learn about fixed income investments.View Course »