ducks
03-23-2005, 06:46 PM
CHARLOTTE, N.C. - Krispy Kreme Doughnuts Inc. is scrapping its test of bakery stores in Wal-Mart stores.
The beleaguered Winston-Salem, N.C., doughnut maker will close five outlets in Wal-Mart stores around the United States as of Sunday, and the sixth in April, according to a company spokeswoman.
"It was a test, and we've made a decision right now that the concept is not viable, but we're going to continue our great relationship with Wal-Mart with our wholesale business," spokeswoman Amy Hughes said Wednesday.
More than 500 Wal-Mart stores carry doughnuts made in Krispy Kreme's own factory-style stores as part of its wholesale business.
A representative for Wal-Mart Stores Inc. said the retailer doesn't comment on relationships with tenants or suppliers.
Stores in Wal-Marts in Charlotte, Mount Airy, N.C., Virginia Beach, Va., Maysville, Ky., and Garland, Texas will close as of Sunday, Hughes said. A store in Hutchinson, Kansas, will close in April.
Asked if the closings are related to Krispy Kreme's financial situation, Hughes said, "That has nothing to do with it." She also said they are unrelated to Dunkin' Donut's move, announced in May, to open its own shops within 10 Wal-Mart stores. Dunkin' Donuts is a unit of Allied Domecq PLC, a British spirits and wine company.
Krispy Kreme began rolling out stores with "Hot Doughnuts Now" signs in Wal-Marts in September 2003 as a test.
Company executives a year ago said the first test store, in Mount Airy, N.C., was generating about $20,000 a week in sales, on average. That was well below the company's average at the time of around $69,000 but profitable, given the lower startup and operating costs, executives said then.
Krispy Kreme has more than 400 company-owned and franchise stores in the United States, Canada, Mexico, Australia, South Korea (news - web sites) and Britain.
Its shares began a sharp decline in May 2004 from lofty levels, after the company issued its first profit warning in its four-year history as a public company. That profit warning since come under regulatory and legal scrutiny amid concerns about and its accounting for franchise repurchases.
Krispy Kreme faces a possible default of that credit agreement Friday, and investors are awaiting word on the company's financial situation and prospects.
Krispy Kreme shares rose 28 cents, or 3.2 percent, to close at $9.15 Wednesday on the New York Stock Exchange (news - web sites). On a 52-week basis, there was a low of $5.05 on Feb. 24 and a high of $35.35 last March 30.
The beleaguered Winston-Salem, N.C., doughnut maker will close five outlets in Wal-Mart stores around the United States as of Sunday, and the sixth in April, according to a company spokeswoman.
"It was a test, and we've made a decision right now that the concept is not viable, but we're going to continue our great relationship with Wal-Mart with our wholesale business," spokeswoman Amy Hughes said Wednesday.
More than 500 Wal-Mart stores carry doughnuts made in Krispy Kreme's own factory-style stores as part of its wholesale business.
A representative for Wal-Mart Stores Inc. said the retailer doesn't comment on relationships with tenants or suppliers.
Stores in Wal-Marts in Charlotte, Mount Airy, N.C., Virginia Beach, Va., Maysville, Ky., and Garland, Texas will close as of Sunday, Hughes said. A store in Hutchinson, Kansas, will close in April.
Asked if the closings are related to Krispy Kreme's financial situation, Hughes said, "That has nothing to do with it." She also said they are unrelated to Dunkin' Donut's move, announced in May, to open its own shops within 10 Wal-Mart stores. Dunkin' Donuts is a unit of Allied Domecq PLC, a British spirits and wine company.
Krispy Kreme began rolling out stores with "Hot Doughnuts Now" signs in Wal-Marts in September 2003 as a test.
Company executives a year ago said the first test store, in Mount Airy, N.C., was generating about $20,000 a week in sales, on average. That was well below the company's average at the time of around $69,000 but profitable, given the lower startup and operating costs, executives said then.
Krispy Kreme has more than 400 company-owned and franchise stores in the United States, Canada, Mexico, Australia, South Korea (news - web sites) and Britain.
Its shares began a sharp decline in May 2004 from lofty levels, after the company issued its first profit warning in its four-year history as a public company. That profit warning since come under regulatory and legal scrutiny amid concerns about and its accounting for franchise repurchases.
Krispy Kreme faces a possible default of that credit agreement Friday, and investors are awaiting word on the company's financial situation and prospects.
Krispy Kreme shares rose 28 cents, or 3.2 percent, to close at $9.15 Wednesday on the New York Stock Exchange (news - web sites). On a 52-week basis, there was a low of $5.05 on Feb. 24 and a high of $35.35 last March 30.