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Krispy Kreme heading for Thailand


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Krispy Kreme heading for Thailand

Published: 2/11/2009 at 12:00 AM

Newspaper section: Business


Krispy Kreme, the popular US doughnut chain, plans to enter Thailand next year through a venture run by Ausanee Mahagitsiri, the eldest daughter of industrialist Prayudh Mahagitsiri.


KDN Co Ltd, wholly owned by Ms Ausanee, signed a five-year agreement with Krispy Kreme Doughnut Corporation last week to develop 20 franchised Krispy Kreme outlets in Thailand. Shop sizes will be between 100 and 300 square metres.


Ms Ausanee and her family also control the PM Group, one of Thailand's largest conglomerates with businesses that range from cold-rolled stainless steel and polypropylene film to golf courses, resorts, real estate development and instant coffee.


Her father has been dubbed the "coffee king" for his success in working with Nestle' to build the market for Nescafe' instant coffee in Thailand.


Ms Ausanee said she decided to open a Krispy Kreme franchise because she was a big fan of the brand while abroad.


"When I studied in Boston, I used to drive four hours to New York in order to eat Krispy Kreme doughnuts," she recalled.


"I was not disappointed with the taste when I arrived. It is really delicious. After returning to Thailand, I still miss it and always ask my husband to buy some from the Philippines."


Krispy Kreme president Jeff Welch said that KDN's "true passion for the Krispy Kreme brand", understanding of Thai consumers, and years of successful business experience in a variety of industries, would make it a string franchise partner.


Krispy Kreme, founded in the United States in 1937, now has franchises in 18 countries, including the Philippines, Malaysia and Indonesia.



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The hot glazed donuts are an amazing way to deliver almost pure sugar. In the southern town I lived in for while, the KK store has a sign that lit up when the donuts were hot. People would pile in. I suspect it maight do well in Thailand.

Serious issues with the IPO though. $29 a share, go to $50, now about $3.50, up from a low $1.00.



Lewis: Doughnut chain still stuck in a hole

By Al Lewis

Dow Jones Newswires

Posted: 06/10/2009 01:00:00 AM MDT



A sewage pumping station should not smell like a Krispy Kreme doughnut.


In May 2004, inspectors in Fairfax County, Va., ran a camera through a sewer line.


It "got stuck in the grease, preventing inspection of the remainder of the line," the county claims in a lawsuit it filed against the doughnut maker last month.


Krispy Kreme Doughnuts Inc. makes 83 million doughnuts a year at its Lorton, Va., plant, which is up-line from the sludge.


"Excessive quantities of highly corrosive wastes, doughnut grease and other pollutants' clog and corrode pipes, resulting in raw sewage spills and system shutdowns, the county claims. It seeks about $2 million in damages and as much as $17 million in penalties.


Krispy Kreme says the claims are unfounded, and that it's been "over 99 percent compliant" with its effluent.


The dispute has been oozing for years. In April 2008, the county issued a cease-and-desist order, forcing Krispy Kreme to haul 15,000 gallons of doughnut goo to a treatment plant every day.


There is something about the image of septic trucks backing up to a doughnut factory that fails to stir the appetite.


Krispy Kreme, founded in 1937, was in a mature industry when it went public in 2000, yet somehow it joined dot-coms on the list of the year's hottest initial public stock offerings.


Early investors bought it up like boxes of Original Glazed. TV and newspaper reporters  running like cops to free doughnuts  swooned at store openings.


Remember those low-fat, low-carb, or low-calorie diets that so often guide consumer choices? Not if you bought Krispy Kreme's stock, which quickly surged above $50 a share.


Turns out, too many doughnut eaters were just cheating on their diets. They would eventually return to their waistline worries, or come to discover that maybe Dunkin' Donuts or myriad other purveyors of deep-fried dough made for a better binge.


Kripy Kreme, which today has 536 stores around the globe, expanded rapidly on borrowed dough. By 2004, its executives stood accused of sugar-coating the books.


A half-dozen of these executives were removed like burned bits from a fryer. Settlements with regulators and class-action lawyers followed.


So, over the past 4-1/2 years, Krispy Kreme has rolled through four CEOs, all trying to get the company out of its hole.


The most recent is Jim Morgan, who last week tried to make soft-serve sound like a strategic plan from the Harvard Business School.


"We continue to believe that Kool Kreme has the potential to provide significant operational leverage by addressing both day-part and seasonal-part challenges," he crowed on a conference call with analysts and investors.


I think he means he's going to sell a product resembling ice cream.


After more than 80 years in business, it seems Krispy Kreme has learned that a lot of people only buy doughnuts in the morning. Oh, and fewer buy them in the summer. So they're going to sell soft-serve, too.


Krispy Kreme's profits were down 53 percent in the quarter ended May 3.


But it was a good quarter, considering the continuing recession and Krispy Kreme's challenges, ending with a $1.9 million profit, and a 2.1 percent increase in company-owned same store sales.


Besides soft-serve, Morgan hopes to add bagels, muffins, cinnamon and pecan rolls and pastries. And fortunately, the costs of flour, sugar, shortening and gasoline are lower than they were last summer.


Krispy Kreme stock has bounced back from $1  but only to about $3.50 a share. And for that, you can more safely invest in a half-dozen assorted doughnuts.


As an over-promised, under-delivered IPO from 2000, it's lucky to be still servicing its debt load amid the latest round of economic implosions. But the doughnut maker is clearly stuck  kind of like that grease wad in the sewer pipe.


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Was a place in Siam center that sold donuts that I thought were very similar to KK. Bappy or something like that.


Was surprised to see it. Had a couple customers. Looked kinda dead. Not so sure that the infernal jungle heat is conducive to donut cravings.


Of course I couldn't understand Starbucks in BKK charging 100bht for a cup of coffee. wtf? Beyond my comprehension.

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I think I'll open a chain of haggis bars. I'll make them donut shaped.


I *heart* haggis. Better than doughnuts (should that choice ever be presented - be advised; go haggis. - "Haggis or Doughnut, sir?" "I'll have the haggis, please." It's THAT easy. Be strong.)


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