Dealbook is reporting (although speculating is probably a better word) that Krispy Kreme Doughnuts (NYSE: KKD) may be preparing to put itself up for sale. This shouldn't come as too much of a surprise given the problems Krispy Kreme has experienced over the last few years. Just in 2007, Krispy Kreme fell from nearly $14 a share to under $3. Although this is bad enough, the long-term picture is even worse. In 2003, Krispy Kreme hit $50, so the five year performance is something like negative 90%. While health fads are in part to blame, with carbohydrates being vilified in many popular diets, most analysts suspect that Krispy Kreme's management is largely responsible for the poor performance.
Marketplace's Herb Greenberg, who has long thought that Krispy Kreme's old CEO needs to go, is the main source of speculation that Krispy Kreme may be looking for a buyer. He argues that the recent resignation of the old CEO, Daryl G. Brewster, suggests that the board is finally getting serious about turning things around. More importantly, the new CEO, James H. Morgan, has an investment banking background, and his involvement suggests that the company is looking for outside intervention.
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
3-03-2008 @ 12:51PM
Brian said...
What does KKD have to do to turn itself around?
3-03-2008 @ 2:54PM
Richard said...
Krispy Kreme has been a mainstay in the Southern Market, particularly in North Carolina. The northern markets met the donut maker with some reservations. Compared to Dunkin Donuts to the southern population, the Krispy Kreme is by far a better product. Fresh and Hot Glazed Donuts are great, but, must be eaten immediately. Dunkin Donuts has a much better variety of product and will ultimately win in the battle for customers who want something different. Dunkin Donuts has much better customer service and marketing campaign, something that Krispy Kreme has never indulged in any mass advertising. Krispy Kreme's days are numbered.
3-14-2008 @ 2:58PM
Barry Charnin said...
To expensive for the size donut they are offering
1-08-2008 @ 1:54PM
Matt Wurtzel said...
Its worth noting that TheDeal.com's Dealscape blog reported the same thing yesterday morning:
http://www.thedeal.com/dealscape/2008/01/krispy_kreme_gets_new_chief.php
1-08-2008 @ 3:29PM
michael said...
Thanks Matt -- duly noted!
1-09-2008 @ 2:05PM
donutdude said...
Those of us in the bakery business have seen this coming for sometime now..........the donut business is a tough business to be in.........