Business

Doughnut wars? After Dunkin', Krispy Kreme says it's growing too

Krispy Kreme DoughnutsLifestyle and LeisureCookingSaudi ArabiaDunkin' Donuts

The day after Dunkin’ Donuts sent Angelenos salivating with news of its imminent return to Southern California, rival chain Krispy Kreme Doughnuts Inc. said it’s growing as well.

Krispy's physical presence “is substantially smaller than that of many other brands in the U.S.,” said Chief Executive James H. Morgan at the ICR XChange Conference in Miami on Thursday.

But the 75-year-old Winston-Salem, N.C., business is looking for a growth spurt, he said. With more than 740 stores in 21 countries, Krispy Kreme plans to have 1,300 locations by 2017.

Most of its existing stores are owned by franchisees abroad. There are 506 international Krispy Kremes, including the first store in India, which opened this week. Saudi Arabia, with 95, has the most locations.

In the U.S., Krispy Kreme owns fewer than half of the 238 stores bearing its brand. It hopes to have more than 400 domestic shops in four years.

“We are solidly profitable, and we are growing again,” Morgan said at the conference.

Krispy Kreme also is trying a new store model, which it’s calling “small free-standing factory shops.” The locations, the first of which opened Thursday in Greenville, S.C., will serve only retail customers.

Most Krispy Kreme stops also make snacks for wholesale distribution into grocery and convenience stores nationwide.

On Tuesday, the company adopted a poison pill measure to dissuade any single stakeholder from snatching up more than 5% of its stock. As the coffee and breakfast sector takes off, with new buyers grabbing chains such as Tully’s, Peet’s and Caribou, Wall Street has dubbed Krispy Kreme a particularly appetizing takeover target.

Krispy Kreme has 20 locations in California, which will soon have to compete with East Coast giant Dunkin’ Donuts, based in Canton, Mass. Dunkin' Donuts said Wednesday that it plans to recruit franchisees to open roughly 150 Southland stores starting in 2015.

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Copyright © 2014, Los Angeles Times
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Krispy Kreme DoughnutsLifestyle and LeisureCookingSaudi ArabiaDunkin' Donuts
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