An Overview of Krispy Kreme Doughnuts Inc

Krispy Kreme Doughnuts Inc. specializes in retail donut foodstuff and was founded in 1937 in North Carolina. Today, there are all over 400 stores which employ 3,900 employees in 45 states and 4 countries. The caller produces about 7.5 million donuts each day. The beau monde is one of the confidential information producers of donuts and is ranked 4th of the top 100 chains in the U.S. (standing as of 2004).The company owns and franchises Krispy Kreme doughnut shops and sells over 20 different kinds of doughnuts, including its Hot sea captain Glazed variety.Today, the company faces some signifi jackpott scrapsEmployees are suing the company over mismanagement of retirement fundsChanges in eating habits book abnormal the companys revenueIn May of 2004, the Krispy Kreme stock skin almost 18 % because of changes in dieting habits, particularly the low-carbohydrate phenomenon. The sale of packaged donuts dropped dramatically. The company claimed this was impacting sales but ana lysts were skeptical because doughnuts are not pattern of as part of a diet, any diet. And changes in the Statess eating habits, especially the health craze that seems to be the electric current pattern is likely to impact the sales of sugary and snack foods. Krispy Kreme doughnuts decease into both categories.Changes in senior management al rooms make investors wary. In 2005, Stephen F. Cooper was named CEO replacing Scott A. Livengood, who has retired as Chairman of the Board, President and honcho Executive Officer and a director of the party. He will make out a consultant on an interim basis. Steven G. Panagos has been named President and Chief run Officer (press release, 2005). The company hopes this change will turn things around.In the companys own words, The caller-up also announced that the results for its fourth nates ending January 30, 2005 have been, and may continue to be, adversely impacted by significant sales declines. For the eight weeks ended December 26, 2 004, system extensive and Company average weekly sales per factory store have decreased approximately 18% and 25%, respectively, compared to the corresponding weeks of the prior year. The suck is also being adversely impacted by the substantial be associated with the legal and regulatory matters previously disclosed. These factors may result in the Company experiencing a loss for the current quarter.KZC will work with the Company to redirect examination whether it should take certain operational actions, which could include the consolidation of store locations. both such actions could result in substantial losses, although it is expected that any restructuring charges for the most part would be non- cash charges. The system wide average weekly sales per factory store, is a non-GAAP financial measure. System wide sales entropy include sales at all company and franchise stores. The Company believes system wide sales information is useful in assessing our market share and concep t growth (press release, 2005).The company needs to change. One low gear may be to consider its offerings. Although the company was initially successful by making doughnuts, they may need to expand and also offer customers healthy choices, such as low-fat muffins and bagels. Although this will change the premise of their business it provides an chance for the company to gain new customers. Dunkin Donuts has successfully altered their offerings and so can Krispy Kreme.The company also needs to settle their regulatory and legal personal matters so that the companys reputation doesnt continue to be negatively impacted. Once they have a clean slate, they should issue a press release assuring consumers that Krispy Kreme has dealt with its issues and is back on track.Addressing any prize control issues and consolidating where possible will also lend an air of credibility, especially to stockholders and potential investors. The company needs to put some significant checks and balances in place to prevent any additional financial scandals and prove that the remnant of the company is to regain financial stability and profitability.The company also faces increase competition and needs to set themselves apart. One way could be to take aim a healthier doughnut-one that is lower in fat but retains the taste.Basically, the company needs an overhaul and having a new CEO is the best way to start. This is the perfect opportunity to implement change on every front. The biggest challenge facing the company is to make these changes as quickly and efficiently as possible to regain their competitive edge and name in the industry.