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Executive Summary
During the 1990s, Krispy Kreme Doughnuts experienced yet another phase of huge expansion. The company had periods of steady growth up until it went public in April 2000. With the huge buzz in the stock market created with its initial public offering, Krispy Kreme had the second best performing stock among all initial offerings in its inaugural year. Under the direction of newly appointed chief executive officer Scott Livengood, the company was sure to rebound from its decreasing sales and shortcomings of its previous managers. Livengood believed the demise of the company was a result of selling wholesale channels and less focus on the Krispy Kreme brand of which it had become famous. The company would direct its attention on becoming a specialty retail strategist focusing on consumer demands and national expansion with franchise and company-owned stores.
Several problems would arise as a result of its new company strategy for expansion. The company began opening new stores at record pace targeting substantial revenue and earnings per share growth at 25 percent. After the initial hype surrounding new store openings, sales began to decline as more stores entered the areas. As a result franchises suffered from financial difficulty because of over expansion and continued disappointment from the newly opened stores. Another minor concern for not only Krispy Kreme but also the doughnut industry was the healthier lifestyle focus of the period. With the creation of the popular low-carb diets and healthy eating advertising, the doughnut industry could expect a negative impact on sales. These growth trends raised huge concerns of the potential growth in the ...