Krispy Kreme's future might not be so sweet
Posted March 2, 2009 5:46 p.m. EST
Updated March 9, 2009 5:13 p.m. EDT
Winston-Salem, N.C. — 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.
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.