Krispy Kreme expands: joint ventures, new stores and people
Krispy Kreme Doughnuts Inc. is expanding in the U.S., Canada and in time, globally. The company announced two joint ventures for expansion into Eastern Canada and New England, the company's last untapped U.S. market area. The Canadian agreement marks the company's first major expansion plan into an international market. Signs also point to future global expansion, with a new executive hire starting in February dedicated to international business.
North American expansion: The Canadian business, known as Krispy Kreme Doughnuts Eastern Canada Inc. (KKDEC), will be developing 32 stores over 6 years in Eastern Canada, which includes Ontario, Quebec, and the four provinces of Atlantic Canada. Roly Morris and Robert Fisher lead KKDEC. Morris held a senior management position with Starbucks Coffee and led the initial expansion of Starbucks in Canada; Fisher has been in the securities industry for more than 30 years with a focus on restaurants and specialty retailing. Krispy Kreme Doughnuts, Inc. will have a 34 percent interest in KKDEC.
Also, New England Dough, LLC, has agreed to develop 16 stores over the next 5 years in Massachusetts, Rhode Island, and Connecticut. Krispy Kreme will participate as a 49% equity partner in the venture. "The experience, talent, and organizational infrastructure that these new relationships bring expand and strengthen our system,'' said Scott Livengood, Krispy Kreme's chairman, president and CEO.
One exec hired as another departs: Additionally, Krispy Kreme hired 38-year-old Donald Henshall to start in February as president of international development. He was formerly managing director of new business development with Overland Group Ltd., a London-based maker of branded footwear and apparel, where he focused on the strategic brand development. He previously was president and chief executive of clothing maker Diesel USA Inc.
CEO Livengood said the decision to hire Don as our president of Krispy Kreme International at such an early stage of international growth was a response to interest "from qualified parties interested in developing a variety of international markets.
"Hiring Don at this early stage gives us the opportunity to refine our global strategy and develop the capabilities and infrastructure to support expansion outside the US. It is also important to point out that we are structuring the organization in a way that insures no loss of focus on our domestic market opportunities.''
These business plans follow the news on Dec. 12, 2000, that Margaret Urquhart had made the decision to step down as president of Krispy Kreme Stores North America and transition into a consulting role with the company. Livengood said, "While I regret losing Margaret's presence day to day, I am pleased we will continue to have her on an as needed basis."
Apparently, Urquhart has done well since Krispy Kreme Doughnuts went public last year. (See Doughnuts to dollars, Krispy Kreme Debuts on Nasdaq Exchange .
Krispy Kreme opened 11 stores since October 2000 bringing the total new stores this year to 36 and total stores in operation to 175 stores in 28 states.
New stores opened in the fourth quarter include Bakersfield, CA, Richmond, VA, Nashville, TN, New Orleans, LA, Austin, TX, Rochester, NY, Florence, SC, Chicago, IL (2), San Diego, CA, and Sacramento, CA. The 63-year-old North Carolina-based company is a leading branded specialty retailer of premium quality doughnuts, including the company's signature Hot Original Glazed.
The Winston-Salem, NC-based company is publicly traded on the Nasdaq exchange. Symbol: KREM. (Click to My Bakery Online to track stocks).
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Edited by Chuck Boyles, Contributing Writer