In a rise-and-fall story that reflects the fortunes of what was temporarily everyone’s favourite doughnut maker, Krispy Kreme Doughnuts replaced its chief executive Daryl Brewster on Monday, naming chairman James Morgan to the joint post of chief executive and president.
The move comes amid constant speculation over how the company might turn itself around. Krispy Kreme said Mr Brewster resigned for personal reasons. He will remain with the company until the end of January and assist in the transition, reports the Wall Street Journal.
Personal reasons?, asks Countenance Blog. “Maybe diabetes.”
It may have something to do with the company’s share price – which has not shown much life since Mr Brewster’s appointment in March 2006 – and today is down about 50 per cent from a high point in mid-2005. Or it could have something to do with what the Journal describes as “allegations of misconduct by former management and bankruptcy filings by several of its franchisees, in addition to competition from larger rival Dunkin’ Donuts”.
But investors took heart on Monday, driving Krispy Kreme’s battered shares up 11.3 per cent to $3.15 on news of the management change.
Krispy Kreme, whose glazed doughnuts once spawned long queues whenever the company opened a new location, continues to struggle, says the Journal, noting that the company reported last month that its Q3 loss narrowed to $798,000 from $7.2m a year earlier, but sales plunged 12%, and franchisees continue to close stores.