Josh Hayden
Jason Craig
Ronnie Jacko
History
 1937 – Founded by Vernon Rudolph, KK opens first store in North
Carolina.
 1940s-1950s - Build own mixing plant and distribution system.
 1960s-1970s - Krispy Kreme begins to expand their stores.
 1990s - Continue expansion that include stores in New York and
California.
Krispy Kreme Profile
Founded In 1937
Headquartered in Winston-Salem, North Carolina
Products – Doughnuts (30 kinds), soft drinks (espresso, chillers),
hot drinks (coffee)
Revenue – 510.21 million USD (2006)
Net Income - 88.45 million USD (2006)
Employees – 4,250
Store Locations
 Krispy Kreme have stores located all over the US
 Stores have not been limited to only the US (Canada, United
Kingdom, Mexico, and Australia)
 Krispy Kreme can be found in grocery stores (Wal-Mart & Target),
convenience stores, and gas stations
Two Locations in Oregon
Beaverton
16415 NW Cornell Road
Beaverton, OR 97006 US
Clackamas
9950 S.E. 82nd Avenue
Portland, OR 97266 US
Store Layout/Design
 Freestanding: Most free-standing Krispy Kreme stores are
constructed with a long window between the customer area and the
kitchen, allowing customers to watch the operation of the doughnutmaking machines.
 Smaller Stores: Most of the smaller stores get their donuts from
other locations rather than producing them on-site.
 Atmosphere: Very welcoming,
with bright lighting. Seating is
limited but available. Factory
tends to pull curious customers
inside.
Advertisement / Marketing
 Free doughnut strategy – “Hot Now”; free doughnut while waiting
in line.
 TV ad campaign
 Gifts/Accessories – shirts, sweatshirts, hats, boxers, coffee, mugs,
toys.
 Fundraising – helped schools raise over $30 million last year (selling
doughnuts, coffee, certificates, and partnership cards).
Distinguishing Aspects
 Store Layout: Factory inside the store where you can watch how
the donuts are made.
 Reputation: Krispy Kreme has always been known as and has had a
reputation of being the best.
 Hot Now: When the Hot Now sign outside the store is lit you can
get hot and fresh original glazed donuts.
Recent Activity
 KK went public in April 2000 at $21/share, and within a year that
number doubled.
 All seemed well for a couple of years, in spite of a few renegade
analysts declaring KK stock “too high, given its modest quarterly
net income.”
 Merrill Lynch downgraded stock to “sell” in October 2002; J.P.
Morgan cut the rating to “underperform” in August 2003.
Downward Spiral
 Many credible Wall Street names held on ‘til May 2004, when KK
stock fell 29% in one day after KK issued a profit warning (they
blamed the low-carb craze seizing the nation). By Sept ’04, the
stock had plummeted 77%.
 Shares took another hit in late July ’04, when KK announced
federal regulators were investigating the company.
 KK failed to file its SEC reports for over a year (failure to meet
accounting and financial reporting obligations).
. . . and it gets worse . . .
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defaulted on loans
unable to borrow more money
two important franchises bankrupt (owed lots to KK)
class-action lawsuit by stockholders
CEO, COO & CFO unloaded shares at peak
caught boosting profits by extorting franchises
sold equipment and booked the revenue before payment was
received – “cooking the books”
“sweetheart deals”
independent auditors refuse to sign off on KK’s financial statement
CEO and six key officers fired
rumors of de-listing on the NYSE
Below
Stock price of KK on
the NYSE (name KKD)
from initial opening in
April 2000 at $21 per
share, to its high of
$49.74/share in August
2003, to its lowest of
less than $4/share in
early 2005, to its
current of $8.41/share.
To The Right
Graph of KK’s number
of retail outets. As the
number of stores
nationwide increases,
sales decreases.
What next?
 Krispy Kreme is struggling back into the market eye after a
desperate tussle with near extinction.
 January 29th, 2007: KK announced it has finally become current in
its SEC filings, and has since maintained that status.
 February 2007: introduction of a new whole-wheat doughnut: “made
with 100% whole wheat . . . and, to make it even better, the doughnut is ONLY 180 calories!”
 April 2007: announces change in its board of directors and names
new corporate officers.
 May 2007: Files its UFOC (Uniform Franchise Offering Circular), essentially
declaring that it is once again, finally, licensing franchises.
Sources
• http://www.businessweek.com/2000/00_44/b3705148.htm
• http://www.businessweek.com/2000/00_44/b3705148.htm
• http://www.cfo.com/printable/article.cfm/4007436
• http://www.krispykreme.com (. . .duh. . .)