 Krispy Kreme delivery van, circa 1939
Krispy Kreme Doughnuts Inc. is the name of a popular doughnut chain that originated in Winston-Salem, North Carolina.
While Krispy Kreme serves up a variety of doughnuts, it is most famous for its traditional glazed doughnut, a very light, plain doughnut covered in glaze and served warm. Many grocery stores and convenience stores also carry Krispy Kreme doughnuts. Although growth of the chain has been steady since the company went public, expansion and profits have decreased since low-carb diets gained popularity.
Most stores are constructed with a long window between the customer area and the kitchen allowing the patrons to watch the operation of the doughnut making machines, which automatically produce rings of dough, bake, deep-fry, flip, and glaze the doughnuts. Each store has a neon sign to indicate when fresh hot doughnuts are available.
Krispy Kreme's competitors include Dunkin Donuts and Southern Maid.
History
The founder, Vernon Rudolph, purchased a secret recipe (although company mythology tells a story whereby Rudolph won the recipe from a New Orleans baker in a west Kentucky poker game) for yeast-raised doughnuts and began selling them to local grocery stores in Winston-Salem in 1937. Because of customer demand, he began selling them directly from his bakery to customers. The first Krispy Kreme store was located on South Main Street in Winston-Salem in what is now called historic Old Salem.
By the 1960s it was well known throughout the southeastern United States, and began to expand across the entire country.
In 1976, Krispy Kreme Doughnut Corporation became a wholly owned subsidiary of Beatrice Foods Company of Chicago, Illinois. The headquarters for Krispy Kreme remained in Winston-Salem, North Carolina.
A group of franchisees purchased back the corporation from Beatrice Foods in 1982.
Krispy Kreme began another phase of rapid expansion in the 1990s and in December 2001, opened its first store outside the U.S. in Mississauga, Ontario, Canada, which is just outside Toronto.
On April 5, 2000, the corporation went public on the NASDAQ using the ticker symbol KREM. On May 17, 2001, Krispy Kreme switched to the New York Stock Exchange, with the ticker symbol KKD, which is its current symbol.
On January 18, 2005, Krispy Kreme announced Stephen Cooper, chairman of financial consulting group Kroll Zolfo Cooper LLC, as interim CEO. Cooper replaces Scott Livengood, who the company said has retired as chairman, president, CEO and a director. The company also named Steven Panagos, a managing director of Kroll Zolfo, as president and COO.
Krispy Kreme's accounting methods have come under considerable fire. Livengood, and former CFO and COO John Tate, as well as current CFO Michael Phalen, and former CFO Randy Casstevens, are currently embroiled in SEC and class action lawsuits about misreporting profits and failing to issue a profit warning as soon as they knew they would fall short of predictions. In addition, the corporation is accused of manipulating earnings through a practice known as "channel stuffing" -- delivering more doughnuts to suppliers than ordered at the end of a reporting period, while still booking the increased revenue, then taking the unsold doughnuts back at the beginning of the next reporting period.
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