Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

Krispy Kreme.ppt by langkunxg


									Josh Hayden
Jason Craig
Ronnie Jacko
 1937 – Founded by Vernon Rudolph, KK opens first store in North

 1940s-1950s - Build own mixing plant and distribution system.

 1960s-1970s - Krispy Kreme begins to expand their stores.

 1990s - Continue expansion that include stores in New York and
              Krispy Kreme Profile

Founded In 1937
Headquartered in Winston-Salem, North Carolina
Products – Doughnuts (30 kinds), soft drinks (espresso, chillers),
       hot drinks (coffee)
Revenue – 510.21 million USD (2006)
Net Income - 88.45 million USD (2006)
Employees – 4,250
Store Locations
 Krispy Kreme have stores located all over the US

 Stores have not been limited to only the US (Canada, United
       Kingdom, Mexico, and Australia)

 Krispy Kreme can be found in grocery stores (Wal-Mart & Target),
       convenience stores, and gas stations
                         Two Locations in Oregon

 16415 NW Cornell Road
 Beaverton, OR 97006 US

 9950 S.E. 82nd Avenue
 Portland, OR 97266 US
                                 Store Layout/Design
 Freestanding: Most free-standing Krispy Kreme stores are
  constructed with a long window between the customer area and the
  kitchen, allowing customers to watch the operation of the doughnut-
  making machines.
 Smaller Stores: Most of the smaller stores get their donuts from
  other locations rather than producing them on-site.
                                       Atmosphere: Very welcoming,
                                        with bright lighting. Seating is
                                        limited but available. Factory
                                        tends to pull curious customers
                   Advertisement / Marketing
 Free doughnut strategy – “Hot Now”; free doughnut while waiting
  in line.

 TV ad campaign

 Gifts/Accessories – shirts, sweatshirts, hats, boxers, coffee, mugs,

 Fundraising – helped schools raise over $30 million last year (selling
  doughnuts, coffee, certificates, and partnership cards).
Distinguishing Aspects
 Store Layout: Factory inside the store where you can watch how
  the donuts are made.
 Reputation: Krispy Kreme has always been known as and has had a
  reputation of being the best.
 Hot Now: When the Hot Now sign outside the store is lit you can
  get hot and fresh original glazed donuts.
                                         Recent Activity
 KK went public in April 2000 at $21/share, and within a year that
  number doubled.

 All seemed well for a couple of years, in spite of a few renegade
  analysts declaring KK stock “too high, given its modest quarterly
  net income.”

 Merrill Lynch downgraded stock to “sell” in October 2002; J.P.
  Morgan cut the rating to “underperform” in August 2003.
Downward Spiral
 Many credible Wall Street names held on ‘til May 2004, when KK
  stock fell 29% in one day after KK issued a profit warning (they
  blamed the low-carb craze seizing the nation). By Sept ’04, the
  stock had plummeted 77%.

 Shares took another hit in late July ’04, when KK announced
  federal regulators were investigating the company.

 KK failed to file its SEC reports for over a year (failure to meet
  accounting and financial reporting obligations).
. . . and it gets worse . . .
   defaulted on loans
   unable to borrow more money
   two important franchises bankrupt (owed lots to KK)
   class-action lawsuit by stockholders
   CEO, COO & CFO unloaded shares at peak
   caught boosting profits by extorting franchises
   sold equipment and booked the revenue before payment was
         received – “cooking the books”
   “sweetheart deals”
   independent auditors refuse to sign off on KK’s financial statement
   CEO and six key officers fired
   rumors of de-listing on the NYSE
Below                     To The Right
                          Graph of KK’s number
Stock price of KK on
                          of retail outets. As the
the NYSE (name KKD)
                          number of stores
from initial opening in
                          nationwide increases,
April 2000 at $21 per
                          sales decreases.
share, to its high of
$49.74/share in August
2003, to its lowest of
less than $4/share in
early 2005, to its
current of $8.41/share.
What next?
 Krispy Kreme is struggling back into the market eye after a
  desperate tussle with near extinction.

 January 29th, 2007: KK announced it has finally become current in
  its SEC filings, and has since maintained that status.

 February 2007: introduction of a new whole-wheat doughnut: “made
  with 100% whole wheat . . . and, to make it even better, the doughnut is ONLY 180 calories!”

 April 2007: announces change in its board of directors and names
  new corporate officers.

 May 2007: Files its UFOC (Uniform Franchise Offering Circular), essentially
  declaring that it is once again, finally, licensing franchises.



• (. . .duh. . .)

To top