Rocky Mountain Chocolate Factory announced Monday it will expand its co-branding relationship with Cold Stone Creamery after test locations posted "double-digit sales gains."
Bryan Merryman, chief operating officer, said Rocky Mountain and Cold Stone will accelerate the number of stores that will be converted to co-branded locations during the next 12 months.
"We have been very pleased with the performance of the four test stores, each of which has enjoyed a significant increase in same-store sales following the introduction of the co-branding concept," Merryman said in a news release. "This was particularly encouraging in light of the fact that the tests were conducted during the seasonally slow winter months for Cold Stone Creamery retail locations."
The company did not release exact sales figures.
Rocky Mountain Chocolate Factory, based in Durango, is traded publicly on Nasdaq. Its stock rose 12 percent to $7.77 Monday on the news.
The success of the co-branding test stores constitutes a bright spot for the chocolatier, which has seen revenues slow during the economic recession. Revenue for the three months ended Nov. 30, 2008, dropped from $8.8 million in 2007 to $7.4 million in 2008. Factory sales and same-store sales also declined. However, the company was free of long-term debt.
Rocky Mountain agreed in October to enter into an experimental partnership with Cold Stone Creamery of Scottsdale, Ariz., part of franchiser Kahala Corp.
Dan Beem, president of Cold Stone, said in the news release that the companies are "highly complementary in terms of reputation, brand awareness and seasonality."
Hundreds of Cold Stone franchisees have expressed interest in the co-branding concept, Beem said.