Winston-Salem, NC-based doughnut maker Krispy Kreme Doughnut Inc. (KKD) is set to debut in Moscow, Russia this week. The latest opening came in the wake of the signing of a development deal between Krispy Kreme and LLC Doughnuts Cafe in Apr 2012. The store opening supports the company’s goal of opening 900 international units by 2017.
Per the deal, LLC Doughnuts Café will unveil 40 restaurants in Moscow in the coming years. LLC Doughnuts Café, an operating arm of Novikov Restaurant Group, boasts superior local market knowledge and has a proven track record in the restaurant industry. It operates about 40 family as well as fine dining restaurants in Moscow, St. Petersburg and London, U.K.
Possessing a strong know-how of local market, the franchisee is hopeful that its collaboration with a global brand like Krispy Kreme would help spread its Glazed doughnuts and freshly-brewed coffee successfully across Moscow.
We believe, Moscow, being the capital as well as the most populous city of Russia, is a strategic fit for the company’s debut in the country. The city is also considered as the political, economical, financial and scientific hub of Russia. The company’s alliances with LLC Doughnuts Cafe reflect its intent to make Russia one of the key markets for international expansion considering its stepped up economic growth.
The Zacks Rank #3 (Hold) company is geared to enter into strategic alliances with several companies during the past few years to expand its presence especially in the international locations. Krispy Kreme opened its first overseas unit 11 years ago. Since then, the company has spread its footprints to 22 locations across Latin America, the United Kingdom, Russia, Asia Pacific and the Middle East.
In 2013, the company unveiled its first outlets in Bangalore, India. The company is also set to debut in Singapore at the end of this year. Apart from this, Krispy Kreme is also trying to venture into the Central and South American markets.
Others players in the same industry, which look attractive at current levels include AFC Enterprises Inc. (AFCE), Domino's Pizza, Inc. (DPZ) and CEC Entertainment Inc. (CEC). All these stocks carry a Zacks Rank #2 (Buy).