Krispy Kreme Closes 70 US & Canada Stores

Beleaguered by 70 store closures in the United States and Canada by the end of May 2006, and questionable accounting practices that has the government looming over its shoulder with an impending investigation, the Krispy Kreme corporation is temporarily closing franchising opportunities in the United States, and, in the interim, is looking at overseas expansion as its main strategy to alleviate its financial woes.

In the annual filing of its business plans to the Securities and Exchange Commission, Krispy Kreme outlines its strategy to open 200 stores within a period of 5 years in Asia, Middle East and Western Europe. Currently, its Asian branches include Krispy Kreme stores in Japan, South Korea, Hong Kong, Indonesia, and, of course, the Philippines.

The Krispy Kreme corporation also hired Daryl Brewster earlier this year as President and Chief Executive Officer to rescue Krispy Kreme from the mire of its own making, which resulted from the mismanagement of Krispy Kreme’s rapid and risky expansion from its North Carolina roots without developing new products to suit the shifting market tastes.

The hiring seems to meet with the approval of Wall Street as Krispy Kreme stock prices rose after the announcement.

The Philippine franchise owners of Krispy Kreme, the same owners of the famous Max’s Restaurant, are independently prepared to open 30 Krispy Kreme stores within 5 years, as support from its US counterpart will surely be limited as it battles its own form of civil war.

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