NEW YORK, July 8, 2003 (PRIMEZONE) -- A "65-year-old overnight success," Krispy Kreme Doughnuts is expanding its market, opening outlets across the Western Seaboard and internationally, Tate told www.wallst.net. Recently, the company purchased a distribution facility in California that is capable of facilitating 180 retail outlets, three times that of their old facility, which Tate said the company outgrew. "We're growing rapidly in the West," Tate said. "We're still in the early stage of growth, and we've upgraded to support that growth."
Tate said the company has been "fortunate enough to enjoy things (it) didn't anticipate," citing a first-week sales record of $480,000, set in Minneapolis. On June 19, Krispy Kreme opened its first retail store in Australia, and had recently announced a franchise opening in Mexico. The company also opened stores in French-speaking Montreal, which Tate called "a huge success," and plans to open retail centers in England and Mexico City. Tate projected annual sales exceeding $1 billion, with an annual earnings growth "in the 40 percent range."
Krispy Kreme's brand name is something that Tate said the company is focused on "nurturing." More than 2 billion unpaid media impressions were visible either in print, online or television media outlets, he said. "We have a long-term goal to be the world's best loved brand," Tate added, citing the company's growing presence in the media, and the impact that has had on the brand's recognition.
Accounting for roughly 10 percent of its sales, Krispy Kreme is also focusing on its beverage campaign. "We started with a very humble objective," Tate said. "To serve our customers coffee worthy of our hot original glazed doughnuts." Although not making an attempt to stack up to coffee retail giants like Starbucks, Tate said Krispy Kreme's beverage division is growing. "Where we go beyond that, I think our customers will tell us."
Within the next three to five years, Tate projected a total of 600 stores for the company, including factory stores that have in-house doughnut making tools, and smaller satellite stores in mature markets.
In March 2003, Krispy Kreme Doughnuts purchased Montana Mills, an Upstate New York-based specialty bread bakery. Although Tate said the company has no immediate plans to utilize the bakery to increase its revenues, they do plan to "spend the next couple of years re-concepting it," he said. "The thinking behind that is that we think of ourselves more as a set of capabilities rather than a brand."
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About Krispy Kreme Doughnuts:
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. Krispy Kreme currently operates more than 285 retail locations in 38 states and Canada. An estimated 7.5 million Krispy Kreme doughnuts are made everyday and more than 2.7 billion are produced each year.
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