Thursday, February 26, 2009

Krispy Kreme may yet survive the kollapsing ekonomy

Krispy Kreme is a North Carolina institution: over the years, thousands of N.C. children have raised funds for their schools and youth groups by peddling boxes of hot glazed doughnuts, and the company is as interwoven to state culture as NASCAR, college basketball and barbecue. North Carolinians are about as provincial and stubborn in the great doughnut battle (Krispy Kreme vs. that sorry upstart Dunkin' Dougnuts) as they are about Eastern-style Barbecue vs. Lexington.

But that doesn't mean the Winston-Salem doughnut maker will survive the global economic recession.

Oddly enough, it may just be the global marketplace that saves the company, says the Winston-Salem Journal.

Krispy Kreme's "growing international sales could be the key ingredient in keeping Krispy Kreme independent and out of bankruptcy -- a fate that some analysts have predicted for this year."

All of which means that the jobs of 3,829 employees, including 414 in Winston-Salem and another 76 in the Triad, are riding on Krispy Kreme's ability to make its doughnuts a lifestyle choice rather than an occasional treat in markets as diverse as China, Kuwait and Turkey.

More than 80 percent of Krispy Kreme's stores are operated by franchisees, and 57 percent of its 526 stores are based outside the United States, as of Jan. 31.

Kristin Graham, a senior analyst for The Motley Fool, a financial-services company, said she questions whether Krispy Kreme will be able to survive because of the level of debt it took on during its ill-fated domestic expansion strategy under a previous top executive, Scott Livengood.

"But if there is a life preserver for Krispy Kreme, it would be its international sales," Graham said. "If they can expand and establish the brand correctly overseas, it could be enough to carry them through 2009."

The company plans to open at least 75 stores in just China, Malaysia and Turkey by 2013. ...

Here's to hoping "KK" (as it's called in our household) survives and flourishes. There's just not really anything quite like a hot glazed doughnut, straight off the glazing journey.


Jen R. said...

Turkey...China...really? I never realized that they touched that many people. It is good to know that the people of Turkey can enjoy these tasty treats too. That, and we need to work on not being the fattest country, so by all means, send our foods over to them!!

M. Lail said...

Amen, sister!