Krispy Kreme

[jergar999]

Bad news.

http://www.macon.com/mld/macon/business/10849003.htm

 

[HMR]

Cooper has about 30 years of experience in rehabilitating troubled businesses, including Enron Corp., Polaroid Corp., TWA, and Malden Mills Industries.

Nothing to worry about, he helped Enron and TWA.

 

[User546]

Anyone know what kind of business jet they were flying?

Krispy Kreme Cutting 125 Workers
[size=-1]PAUL NOWELL[/size]
[size=-1]Associated Press[/size]

CHARLOTTE, N.C. - Krispy Kreme Doughnuts Inc. is working to avoid a financing crunch this spring, cutting about 125 jobs and jettisoning its corporate jet as it aims to conserve cash.

The moves announced Tuesday were among the first major decisions from the struggling doughnut chain's new management.

Krispy Kreme said the cuts would affect workers about one quarter of the workers at its Winston-Salem headquarters and at plants where doughnut mix is made, equipment is manufactured and doughnuts are distributed.

"Krispy Kreme is a great brand, and we are working very hard to help the company rediscover its potential," said Steve Panagos, president and chief operating officer.

Panagos and Stephen F. Cooper, the company's chief executive, were brought in last month after former CEO Scott Livengood was forced out by the company's board.

Krispy Kreme's 360 United States stores are owned and operated by franchisees; as such, they are not affected by the corporate cuts announced Tuesday. Spokeswoman Amy Hughes said affected workers were notified of the layoffs Tuesday.

Krispy Kreme's "Hot Now" doughnuts were once a trendy snack and its stock was a Wall Street darling early this decade after an initial public offering in 2000.

But the company has lost money in two of the last three fiscal quarters and is the target of shareholder lawsuits and a federal probe.

Krispy Kreme said in a news release it anticipates the job cuts will mean annual pretax savings of approximately $7.4 million and a cash restructuring charge of about $600,000 in the first quarter. Getting out of a lease on its business jet would result in a net savings of about $3 million.

Krispy Kreme said the moves are necessary to avoid a cash crunch. The company said it also will need additional credit to fund operations and capital expenditures by March 25, when a waiver from its primary lenders expires.

"There can be no assurance that the company will be able to reach any agreement with the banks or that funding will be available when and in the amounts needed," the company said.

Last month, the company's lenders agreed to push back to March 25 a deadline under which the company would be in default of its credit line because it has not filed quarterly financial statements for the period that ended Oct. 31.

In the agreement, Krispy Kreme agreed not to borrow any more cash without its lenders' consent.

As of the end of October, the company had borrowed about $91 million under the credit line.

Krispy Kreme's board turned to Cooper in an effort to reverse problems that include sinking profits, a federal securities probe and allegations of corporate deceit.

Cooper, 58, is head of Kroll Zolfo Cooper LLC, a corporate recovery and advisory firm Krispy Kreme retained as its financial adviser and interim management consultant. Cooper has about 30 years of experience in rehabilitating troubled businesses, including Enron Corp., Polaroid Corp., TWA, and Malden Mills Industries.

Cooper is also serving as interim chief executive of bankrupt Enron.

 

[mobie]

Jet at K.K.

They were flying a Falcon 900 that was sold for 30 mil. to a company in ILM, they still have a LR-60 flying 91/135 crewed by Piedmont Hawthorne. Hope they keep the 60, but do not think they will to much bad press.

 

[Brett Hull]

A few weeks ago when they fired their President, I read an article that said they were keeping him around as a consultant on a 6 month renewable contract at a salary of @ $45K a month.

How the **** does that work? He obviously couldn't run the company, but they're going to ask him advice anyway? How does that conversation go?

New President: "So, we need to raise some cash. What should we do, Bill?"

Bill: We should sell this for this price, and offer that to the customers at that price, and....

NP: O.K. Well now we know what we're not doing, who else has an idea.

What a way to make $45K a month!

 

[NJAowner]

$$

Consulting agreements and othewr severence agreements are used as a carrot so the CEO or other igh executive will go quieting (bith in cases such as these and mergers). If he knew he was out a job with no pay effective in 1 week, he would stand in the way. If he gets some $$, he will leave quietly and let the business move along.

Fly safe.

 

[StaySeated]

45k a month is a deal compared to the parachutes that Goodwin (UAL) and Tilton (USA) received, both in the deep 8 figure range. Why they weren't charged like the enron clan is amazing.

 

[Snakum]

They were flying a Falcon 900 that was sold for 30 mil. to a company in ILM, they still have a LR-60 flying 91/135 crewed by Piedmont Hawthorne.

So that gold/bronze-colored Lear has always been owned by P-H? I've gotten free donuts from the crew a couple times, and I thought they were KK employees. I guess it's still bad for the 900 crew. Bummer, anyway.

Minh

 

[sydeseet]

Did they even complete a full year of ownership on the 900? It was the talk of the town in INT when it rolled onto the ramp last year. My how quickly things change.........

I think they're in trouble deep.

 

[LXJ31]

Krispy Kreme jumped the shark in more ways than one. A few years ago it was an edgy brand, not readily accessible to "the masses." When I lived in Dallas, we drove all the way down to Arlington when they opened that store to get doughnuts, they were that good. Most nights, the line when out of the parking lot and into the street. Now, I know fads will fade and they couldn't hope to keep that pace but when they started selling KK doughnuts in friggin' gas stations and convenience stores, it made the KK brand become ho-hum. The doughnut quality itself suffered as well; KKs are best when they are hot and fresh, not sitting in a box at 7-11. So they open all these expensive stores to sell doughnuts, yet they sell them at the gas station...

The LR60 guys were real nice, I saw them at the training center a couple of years ago.

 

[Bandit60]

Krispy Kreme jumped the shark in more ways than one. A few years ago it was an edgy brand, not readily accessible to "the masses." When I lived in Dallas, we drove all the way down to Arlington when they opened that store to get doughnuts, they were that good. Most nights, the line when out of the parking lot and into the street. Now, I know fads will fade and they couldn't hope to keep that pace but when they started selling KK doughnuts in friggin' gas stations and convenience stores, it made the KK brand become ho-hum. The doughnut quality itself suffered as well; KKs are best when they are hot and fresh, not sitting in a box at 7-11. So they open all these expensive stores to sell doughnuts, yet they sell them at the gas station...

The LR60 guys were real nice, I saw them at the training center a couple of years ago.

I have to agree with you completely. Flawed business plan.

 

[Gearmunky]

The funny thing is that my last year in college we used KK as the "model" business plan (along with SWA, Perdue..etc.) Now a year later thanks in part to overexpansion and the Atkins craze they're almost going out of business. It's ashame and the 45k a month thing is dispicable.

 

[sleepy]

Is their EX and Easy or straight EX? Who bought it, or is it still for sale?

 

[mobie]

A/C sold

It was sold to a pharmaceutical comp. in ILM. I think the crew went with it. It was not an Easy EX.