Krispy Kreme's future might not be so sweet

Posted March 2, 2009
Updated March 9, 2009

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— The economy is taking a bite out of a Winston-Salem-based Wall Street sweetheart.

Krispy Kreme stock, which once sold for more than $44 a share, opened at $1.26 Monday and lost 7 cents by the close of the stock market.

Credit research firm Moody's Investors Services predicts the doughnut maker is one of 15 businesses – including Rite Aid, Blockbuster and Chrysler – that will go bankrupt this year.

doughnut Krispy Kreme to go bankrupt?

The credit research firm says Krispy Kreme "over-expanded during the doughnut heyday of the 1990s, taking on a lot of debt."

Moody's also says the chain has not earned an operating profit in three years.

But Brian Little, a spokesman for Krispy Kreme, said Monday that the future is bright for the company.

"Krispy Kreme is a company that's been around for 71 years, and we don't see a reason why we won't be around for another 71 years," Little said.

Little also said the company has reduced its debt by $44 million in the last two years and plans to open two more stores in the Southeast in the next two months and is eying expansion in the Triangle.

He said it also is opening stores in China, Turkey and Malaysia.


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  • jse830fcnawa030klgmvnnaw+ Mar 13, 2009

    I just bought 200 shares of Krispy Kreme stock at $1.13 per share. I believe in the KK's revised business plan and I think they will pull through. They may have to close some stores as a last resort, but I do not believe that they will go bankrupt. Moody's forecast was way too moody to be real ... there are other companies with larger debt ratios. At least KK is working through their debt and engaging their business plan, despite the economic recession.

  • See Chart Mar 3, 2009

    They need a seaweed donut or tofu donut (something
    not fried in lard) for the new healthnuts.

  • DowntownGirl Mar 3, 2009

    Time Out and Krispy Kreme, mpheels? Could it get any better? Go ahead and eat the other hundred things you can think of, ncsudan. I'm with you, HappyGirl08, SAVE THE KRISPY KREMES!!

  • oldschooltarheel Mar 3, 2009

    JoCoGeo - don't worry a bit about the financial solvency of a KK in Chapel Hill. That is the virtual nursery for hypocricy (see Prof. Edwards teaching Poverty 101) - It'll be see & be seen spending big $$$$ on uber healthy - than slip in to nasty, sugary, greasy KK in the middle of the night... the alcohol makes 'em do it, it's always the alcohol . KK will do jes fine in CH.

  • maddiesmom972 Mar 3, 2009

    I agree the donuts bought inside a convenience store are never fresh...and if you are going to eat the worlds best donut and have to take the hit for the calories then you want them hot and fresh. My friend and I bought two dozen this past weekend. Believe me between three kids and two adults those donuts didn't last anytime! We enjoyed every hot glazed moment.

  • mpheels Mar 3, 2009

    They definitely need a KK in Chapel Hill, especially if they can have it open until 3am. I love Time Out, but a hot glazed donut after I night on the town would be a nice change of pace.

  • Greyhound_Girl Mar 3, 2009

    I like the hot donuts, now, the ones in the store are old and hard (ICK!) I work in downtown Raleigh and am tempted daily to go get some. However, I'm trying to lose some weight and refuse to add all those calories and fat into my diet. I would probably have to stay on the treadmill for an extra hour to burn off half a donut!! LOL

    If they made them healthier, they wouldn't taste as good, so don't waste money reformulating.

    Sorry Krispy Kreme....

  • Nobody but Carolina Mar 3, 2009

    I think the Wendell, Knightdale, Zebulon are would be another good area for a store.

  • ncsudan Mar 3, 2009

    I can think of a hundred other things I would rather eat than a KK doughnut. These things are for the young to eat from time to time. They overexpanded and need to contract again. I'm sure they will survive as a more regional based entity, which, IMO is for the best.
    This situation is also not unlike what happened to SNAPPLE in the 80s-90s. They expanded so quickly, their stock price and market cap. was so unrealistically high, that when you looked at it you were like, this company makes Iced Tea, and they are worth WHAT? Its doughnuts people, the sky high stock price and market cap. was nothing more than hype. This is just gravity coming into play.

  • Fredrick Bimmell Mar 3, 2009

    It would break my heart to see them close the KK in downtown Raleigh. My Grandfather took my Dad there. My Dad took me and my Grandfather there. I take my kids there ............