Will Kreme rise again in region?
Remember Krispy Kreme?
The melt-in-your-mouth doughnut maker was a crowd pleaser — until it wasn’t. A too-fast expansion beyond a regional base, combined with a less-than-stellar customer experience and wobbly financials, nearly killed the North Carolina company.
But Krispy Kreme is back, profitable and expanding again.
Could the Capital Region see the company’s neon “hot now” sign lit once more? Only time will tell.
We lost our sole retail store in 2006 after its Buffalo-based franchisee closed the Latham site. The chain disappeared upstate after remaining stores in central and western New York were shut in 2007 and 2008.
But a new store push is underway — particularly internationally — with an eye-popping goal of 1,300 shops by 2017, up from 855 today. Most of the new stores will be overseas, but the U.S. could see its nearly 200-shop count doubled under the plan. All will be franchised stores.
Houston, Dallas and Southern California are getting new stores this year; interest also is reportedly high in Philadelphia and Baltimore. No announcements about New York have been made, a spokeswoman said. (The only remaining Krispy Kreme in the state is a counter at Penn Station in Manhattan.) Key to the new Krispy Kreme is a new store model, new executives and a firm new belief that the best is yet to come.
The latter was part of the valedictory offered in a Monday earnings conference call by James Morgan, who led the company’s resurrection over the past six years and turned over the reins this week to Tony Thompson, former chief executive of pizza chain Papa John’s.
Morgan, who will stay on as full-time executive chairman of the board, said he and Thompson, now president and CEO of the company, “share a vision that Krispy Kreme’s best days still lie in front of it.” One way to get there, he said, is through “small factory shops,” which are being tested at nearly a dozen locations. Spokeswoman Lafeea Watson said these are roughly 2,300-square-foot stores that have the full doughnut-making capability of a traditional store, which is about twice the size.
The resulting lower overhead, she said, “will make it easier for our franchise partners to open new locations and ultimately make the brand more accessible to our customers.” But while it’s good to have goals and vision, a company also has to perform — and Wall Street wasn’t impressed with the fiscal first-quarter numbers Krispy Kreme posted after the markets closed Monday. Its stock was pounded on Tuesday and Wednesday.
Although revenue and profit both rose in the quarter, they didn’t meet expectations. And the company also announced it was dialing back full-year projections a bit as a result of higher personnel and operating costs.
All of which could mean your hankering for a Krispy Kreme Hot Original Glazed may not be satisfied locally very soon.