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Krispy Kreme Doughnuts, Inc. Message Board

  • arthurx19 arthurx19 May 10, 2000 6:23 PM Flag

    Let's talk REAL issues

    I have some concern about KREM growing too
    quickly. But, my sense is the company is far from that
    particular problem right now, at least in new markets.


    Two quick questions, anyone, (1) what is the history
    and current performance of KK in Arizona, Iowa,
    Kansas, Missouri, Nebraska, and Nevada? (2) How is
    performance in states where serious chain competitors exist
    (e.g., Dunkin Donuts)?

    Any input is appreciated.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • in the Chicagoland area. There are plans to open
      a Super Kreme(a store plus a plant that will
      produce product for various retail outlets)and none other
      than Mr.Restaurant himself (in Chitown anyway) Rich
      Melman,of Lettuce Entertain You Enterprises Inc. and Icon
      LLC have agreed to develop KKD in Chicago and the
      Pacific NW. Anything Melman touches turns to gold and if
      he's in you can take it to the bank it will make a
      large pile of dough. PI.

      The folks here are
      dying for a Kreme to open in their neighborhood and to
      say it has a tremendous cult following is an
      understatement. Being in a large market there is competetion from
      DD, family bakeries, Safeway,you name it.The two
      stores in Summit and Midlothian have lines inside and
      out.If they ever decide to open in Naperville,
      Schaumburg or Gurnee, lookout. The store/plant in Elk Grove
      will be in the middle of one of the largest industrial
      parks in the U.S. We're talkin non stop, 24/7 folks.
      It's a knock down that it will make a mint.

      If
      that's not enough DD just did a study and found that
      doughnut consumption in this market is up 30% from last
      year. Make all the obvious jokes you want but the KKD
      Kool-Aid is flowin.
      What does this mean to the stock?
      Who the hell knows. It's all a gamble anyway. Maybe
      short,maybe long, but one things for certain,you would be
      crazy not to want a piece of a Chicagoland franchise.
      That my friends is a fact.

      • 1 Reply to retro_papa
      • "Lettuce Entertain You Enterrprises" buying a
        franchise does not mean krem will be worth more than a .50
        (half a buck)more than than current book. If they buy
        one! And only if they make it work. They have to learn
        how sell into retail food distribution which will not
        happen overnight. I would suggest you look at SARA LEE
        and what they had to do to make money selling product
        even with NATIONAL NAME RECOGNITION, remember "nobody
        does't like Sara Lee", check that stock out and how they
        produce product. KK product can be copied by any food
        producer and they will be if the public creates a real
        demand and being in business since 1937 they have not
        become a household name. 63 years to build a cult
        following to make a 2% profit? Selling at 89 times
        earnings! You had better know more about this stock than
        the cost Pepto Bismo for the indigestion you are
        going have.

    • That is why KK went public when they did. Sell
      the sizzle, bail after the lockup, continue to pull
      down outrageous salaries and let the ninnies take the
      risk with the growth strategy that is unproven in
      these relatively new markets.

      I don't think they
      will receive significant competition from Dunkin' or
      Winchells, since the product and "donut theater" they
      profess to sell is eatertainment. And we all know how
      well that is playing (PHL (now bankrupt), RAIN, DAB,
      etc.) With their high fixed costs relative to other
      donut sellers, they need to keep increasing the revenue
      stream or they will fail.

    • the locals have gone crazy for KREM. Stores are
      popping up all over and there are even stores in some
      casinos (Excalibur, Texas Station.) I also think that
      KREM won the "best of Vegas" doughnut in the local
      paper. I always take a box home to Reno, and when people
      see me with it in the airport in Vegas they always
      make positive comments.

      There is currently no
      store in Reno, but one is planned. I know it will be a
      huge hit here also.

      Regards,

 
KKD
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