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Josh Hayden Jason Craig Ronnie Jacko

Josh Hayden Jason Craig Ronnie Jacko. History. 1937 – Founded by Vernon Rudolph, KK opens first store in North Carolina. 1940s-1950s - Build own mixing plant and distribution system. 1960s-1970s - Krispy Kreme begins to expand their stores.

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Josh Hayden Jason Craig Ronnie Jacko

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  1. Josh Hayden Jason Craig Ronnie Jacko

  2. History • 1937 – Founded by Vernon Rudolph, KK opens first store in North Carolina. • 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 California.

  3. 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

  4. 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

  5. Two Locations in Oregon • Beaverton16415 NW Cornell RoadBeaverton, OR 97006 US • Clackamas9950 S.E. 82nd AvenuePortland, OR 97266 US

  6. 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 inside. Store Layout/Design

  7. Advertisement / Marketing • Free doughnut strategy – “Hot Now”; free doughnut while waiting in line. • TV ad campaign • Gifts/Accessories – shirts, sweatshirts, hats, boxers, coffee, mugs, toys. • Fundraising – helped schools raise over $30 million last year (selling doughnuts, coffee, certificates, and partnership cards).

  8. 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.

  9. 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.

  10. 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).

  11. . . . 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

  12. Below Stock price of KK on the NYSE (name KKD) from initial opening in April 2000 at $21 per 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. To The Right Graph of KK’s number of retail outets. As the number of stores nationwide increases, sales decreases.

  13. 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.

  14. Sources • http://www.businessweek.com/2000/00_44/b3705148.htm • http://www.businessweek.com/2000/00_44/b3705148.htm • http://www.cfo.com/printable/article.cfm/4007436 • http://www.krispykreme.com (. . .duh. . .) We used th’ in’ernet!

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