spy Kreme (pronounced crispy cream) is a doughnut company founded in July 13, 1937.

Krispy Kreme founder Vernon Rudolph bought a secret yeast-raised recipe from a New Orleans chef, rented a building [2] in what is now historic Old Salem in Winston-Salem, NC, and began selling to local grocery stores. Products are sold in Krispy Kreme stores, grocery stores, convenience stores, gas stations, WalMart and Target stores in the United States. Internationally, Loblaws supermarkets and PetroCanada gas stations in Canada along with BP Service Stations and BP Travel Centres and Seven Eleven in Australia carry Krispy Kreme. In the United Kingdom Tesco supermarkets, Tesco Extra and [3] most service stations carry Krispy Kreme products. The company's growth was steady prior to its initial public offering but profits have decreased in recent quarters.
Contents
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1 History

o o o o o

1.1 Growth 1.2 IPO and accounting scandals 1.3 Management shuffle 1.4 New offerings 1.5 International operations

2 References 3 External links

History [edit]
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Krispy Kreme delivery truck, circa 1939

Krispy Kreme Doughnuts

Krispy Kreme's founder Vernon Rudolph and his uncle purchased Joseph LeBeouf's donut shop on Broad Street in Paducah, Kentucky along with a secret recipe for yeast-raised doughnuts in 1933 acquired from a New Orleans French Chef. Rudolph began selling the yeast doughnuts in Paducah and delivered them on his bicycle. The operation was moved to Nashville, Tennessee and other family members joined to meet the customer demand. Rudolph sold his interest in the Nashville store in 1937 and opened a doughnut shop in Winston-Salem, North Carolina selling to grocery stores and then directly to individual customers. The first store in North Carolina was located in a rented building on South Main Street in Winston-Salem in what is now called historic Old Salem. The Krispy Kreme logo was designed by Benny Dinkins, a local architect. Expansion occurred in the 1950s, including an early store in Savannah, Georgia. By the 1960s, Krispy Kreme was known throughout the Southeast, and it began to expand into other areas. In 1976, Krispy Kreme Doughnut Corporation became a wholly owned subsidiary of Beatrice Foods of Chicago,Illinois. The headquarters for Krispy Kreme remained in Winston-Salem. A group of franchisees purchased the corporation back from Beatrice Foods in 1982.

An assortment of doughnuts on display in a shop in Washington, D.C.

Growth [edit]

Krispy Kreme donuts being prepared (high quality)

Krispy Kreme began another phase of rapid expansion in the 1990s, opening stores outside the southeastern United States where most of their stores were located. Then, in December 2001, Krispy Kreme opened its first store outside the U.S. in Mississauga, Ontario, Canada, just [4] outside Toronto. Since 2004, Krispy Kreme has rapidly expanded its international operations.

IPO and accounting scandals [edit]

On April 5, 2000, the corporation went public on the NASDAQ at $21 using the ticker symbol KREM. On May 17, 2001, Krispy Kreme switched to theNew York Stock Exchange, with the ticker symbol KKD, which is its current symbol. The stock reached what would be its all-time high of $50 on the New York Stock Exchange in August 2003, a gain of 235 percent from its IPO price. For the fiscal year ended in February 2004, the company reported sales of $665.6 million and operating profits of $94.7 million from almost 400 stores (including international locations). The market initially considered the company as having "solid fundamentals, adding stores at a rapid clip and showing steadily increasing sales and [6] earnings." Since then it had lost 75-80% of its value by 2005, amid earnings declines, as well as an [7] SEC investigation over the company's alleged improper accounting practices. In May 2004, the company missed quarterly estimates for the first time and suffered its first loss as a public company. Chairman and CEO Scott Livengood attributed the poor results to the low-carbohydrate diet craze. This explanation was viewed with skepticism by analysts, as "blaming the Atkins diet for [6] disappointing earnings carried a whiff of desperation", and as rival donut chain Dunkin' Donuts has not [8] suffered from the low-carb trend over the same compared period. Analysts suggested that Livengood had expanded the chain too rapidly after the IPO, which concentrated [8] certain markets with too many stores. While this approach initially grew revenues and profits at the parent-company level, due to royalty payments from new franchisees, which also increased sales, this reduced the profitability of individual franchisees in the long run as they were forced to compete with one another. For the 2003-04 fiscal year, while the parent enjoyed a 15 percent increase in second-quarter revenues, same-store sales increased only a tenth of a percent during that time. By contrast, McDonald's focused on profitability at the franchise level. Krispy Kreme also had supermarkets and gas stations carry their donuts, which soon contributed up to half of the chain's sales, creating further market saturation as well as increasing competition to its franchisees. All this expansion devalued Krispy Kreme brand's novelty, by making the once-specialty donuts ubiquitous, particularly as the newer sales outlets required pre-made donuts as opposed to the o
[5]