Krispy Kreme Secrets and Rumors: Is the Company Closing All Stores in 2022?

Joel Eisenberg

The controversial chain has withstood a host of legal challenges and filed for bankruptcy. Today, new strategies have been implemented and some are speaking out.

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Krispy Kreme DoughnutsAdobe Stock

Author’s Note

This article is based on corporate postings and accredited media reports. All linked information within this article is fully-attributed to the following outlets: Wikipedia.org, Mashed.com, ScrapeHero.com, Investors.KrispyKreme.com, Google.com, and Eater.com.

Introduction

According to Wikipedia.org: Krispy Kreme was founded by Vernon Rudolph, who bought a yeast-raised recipe from a New Orleans chef, rented a building in 1937 in what is now historic Old Salem in Winston-Salem, North Carolina, and began selling to local grocery stores. Steady growth preceded an ambitious expansion as a public company in the period 2000 to 2016, which ultimately proved unprofitable. In 2016, the company returned to private ownership under JAB Holding Company, a private Luxembourg-based firm. In July 2021, Krispy Kreme became publicly traded again on the Nasdaq.

In recent years, troubling past reports about the company have resurfaced.

In July of 2020, Mashed.com published “The Real Reason Krispy Kreme Almost Went Out Of Business” by Maria Scinto. As widely reported in other outlets, Krispy Kreme saw substantial business turns in its history to the point of a Chapter 11 bankruptcy filing in 2005.

From Scinto’s article: In 2001 Krispy Kreme went public on the New York Stock Exchange, and within two years shares would be traded for $50 apiece. By this time, Krispy Kreme had stores in England, Australia, and Korea, and they were cranking out nearly 3 billion donuts each year. Then, all of sudden, what once was sizzling seemed to start fizzling. Profits were down, the SEC launched an investigation into some dodgy accounting practices, and the SEO found himself out on his ear.

In 1999, when Krispy Kreme opened in Southern California, lines were quite literally around the block for its first months of operation. I remember a friend excitedly saying to me, “Honestly, you have never tasted donuts like this before. The hype is justified!” He, like me, was from New York originally. This was high praise and reportedly not confined to the west coast. Krispy Kreme’s national expansion became a veritable phenomenon.

Today, according to ScrapeHero.com, there are 368 Krispy Kreme locations in the United States, and California alone accounts for 35 of those locations, the most of any state in the country. Over 1300 stores exist in total, worldwide.

The company, though, has certainly experienced its ups and downs.

Let us explore further.

2022 Plans

According to a March, 2022 NewsBreak article written by Jenn Leach, entitled “Former Krispy Kreme Donuts Worker Shares Restaurant Secret,” videos of individuals representing themselves as past Krispy Kreme employees spill on behind-the-scenes “secrets” of the company.

In December, 2020, Mashed.com published a followup article to their previously linked piece, this one entitled “The Untold Truth of Krispy Kreme,” which indeed delves into those and other behind-the-scenes company aspects. One particularly troubling incident occurred when a British location adapted the spelling of “club” as “klub“ to fit with the Krispy Kreme ethos. Thus, the Krispy Kreme Klub Wednesdays, or KKK Wednesdays, a children’s winter break promotion, was formed.

From the article, which addresses the issue: Predictably, there were plenty of complaints, and the store removed the promotional Facebook posts after it was pointed out that the name was the same as the abbreviation for the American hate group, the Ku Klux Klan. A spokesperson for the company told the Guardian, "Krispy Kreme apologizes unreservedly for the inappropriate name of a customer promotion at one of our stores. This promotion was never intended to cause offense. All material has been withdrawn and an internal investigation is currently underway."

For an overview of Krispy Kreme’s myriad legal issues over the years, see Eater.com article here about a $5 million class-action lawsuit filed in 2015 regarding false advertising and fraud, to federal legal entanglements as listed in the previously-linked Wikipedia page.

In the present, the company’s ship appears to have stabilized. The outlook for the current calendar year, to answer a question rampant on social media — as a targeted Google.com search will verify — is a positive: The company is under no imminent danger of going out of business.

Conclusion

By all referenced indicators, Krispy Kreme appears to be doing fine presently. Its business has stabilized, and plans for expansion have been renewed.

Per the company’s most recent finance report via Investors.KrispyKreme.com: Krispy Kreme, Inc. (NASDAQ: DNUT) (“Krispy Kreme” or the “Company”) today reported strong financial results for the fourth quarter and full year ended January 2, 2022 with fourth quarter net revenue growing 13.8% year-over-year, or 21.5% adjusted for the extra 53rd week in 2020. For the fourth quarter, organic revenue grew 13.9%, including the now fully-exited legacy wholesale business, or 19.6% excluding this business, year-over-year. For the full year, net revenue grew 23.4%, while organic revenue grew 12.5%, or 21.4% excluding the legacy wholesale business.

The outlook, for now, is optimistic.

Thank you for reading.

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I am an award-winning author, screenwriter for film and television, and producer. My mission on News Break is to share socially important perspectives on both culture and pop-culture. Member of PEN America, and the WGA.

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