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Krispy Kreme Doughnuts, Inc. Message Board

  • stockmanager_99 stockmanager_99 Jul 19, 2005 10:39 AM Flag

    store closings

    pardon my ignorance, but it seems to me there have been quite a few closing over the past 10 days or so. What is the degree of store closings, as it relates to past closings?

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    • buy the bad news....
      You have an interesting twist on yet another idiotic pseudo-axiom...
      Buy the rumor, sell on the news.
      As a KKD shill, you probably have to invent so many other stupidities for the company that you should simply go into research and development.
      If all the crooks in the World would just tunnel their brains into legitimate operations, we would be in the 23rd century by now.

    • Nice attempt at a metaphor, however uncertainty is EXACTLY when you want to buy.

      Buy the bad news - Sell the good.

      And, this is not life or death. You win some you loose some - your still around to play the game and any losses you write off on your taxes anyway. Right now KKD is a great risk/reward ratio. When they do file their statements there will be a relief rally - where all the worried people previously holding back will be comforted by the certainty of those filings.

    • This is by far the most.

      We are in the early stages of the long awaited operational restructuring, imo. Whether or not pooper scooper is in control of the process is uncertain.

      Are the franchisees being forced to close factories because of their (hypothesized) dire financial straits or is this all part of Kroll's grand plan?

      I'm a little surprised that the kkd spokesperson is implying that the decision to shut down franchise shops such as Amarillo is made by kkd. It should be made by the franchisee of which kkd is only a 1/3 owner.

      Is pooper scooper aiding in the decision making process of closing a franchise? Maybe, although opening a kkd in Amarillo was ridiculous from the outset and the decision to close it (at least eventually, depending upon the lease terms and how bad things are) is a no brainer.

      So, what I'm not entirely clear on is whether the operational restructuring pertains just to company stores or if it includes all system stores, i.e. the franchisees. If it's systemwide, why would the franchisees go along with whatever Kroll says?

      Are they somehow at his mercy? Or have they place their trust in him? What do the franchisees hope to get out of closing down doughnut shops?

      If Kroll is not calling the shots (for the franchisees), then this thing could spiral out of control very quickly. If they are calling the shots, then we should still see numerous closings in the very near future as there are many, many stores which need to be closed; if Cincinnati needs 0 retail stores and Indianapolis 1, why does Wichita, KS need 2 and Springfield, MO need 2 and Overland Park, KS need 2 and countless other examples of overexpansion.

      So, imo, one way or the other we're going to see lots of store closing activity, though not necessarily any comment from kkd regarding it.

      Another thing. It is curious that all the store managers have said "No comment" when asked to comment on the store closing. My guess is that whatever severance or alternative employment they have been given will be rescinded if they talk. Just a guess, though.

      • 3 Replies to di_vur_se_fi
      • So we have seen a flurry of store closings, which is consistent with the guidance provided by KKD. What percentage of the store base has now closed? Tell me again how this indicates the company is on the brink of BK?

      • Suppose KKD gets a couple of breaks: (1) KooperPnagas successfully closes all money-losing outlets and expands their wholesale operation by 50%. (2) There's a 15% pick-up in donut sales all across markets, US and foreign. [The 15% figure is a generous extrapolation from an actual 10% rise recorded by a couple of generic donut stores in Texas.]

        Are these developments sufficient to keep KKD going? I know that di_vur_se_fi's numbers based on pre-IPO profits versus current debt servicing requirements almost certainly rule out KKD's survival even if all these big 'ifs' come to pass. Or, have profit margins and market conditions changed markedly from the pre-IPO days so that the $2.3million yearly profit (pre-IPO) now translates to a figure much higher than that?

      • if kroll is in control, clearly they will violate EBITDA covenants. With KKM&D slowing down, royaltees are the only significant source of revenue. So if this is the case, clearly kroll expects a ch.11 filing soon.

        ch.11 soon vs. spiral out of control...am I missing something or is this the first time that we have 'proof' that ch.11 is coming soon?

 
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