Krispy Kreme down to a half-dozen stores in Canada
The lineups and the media buzz are gone, and so are most of its stores. Krispy Kreme, which entered Canada with a bang, has shrivelled to a half-dozen doughnut stores.
KremeKo Inc., which has exclusive franchise in every province except British Columbia, filed for protection from its creditors on April 15. It tried to find a suitable buyer this summer but was unsuccessful.
KremeKo hopes that it can salvage its six remaining stores.
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"Although the company has closed six of the twelve stores operating since the granting of (bankruptcy protection), management believes that the remaining six stores represent a suitable core operation and is not planning any further store closures," the court-appointed monitor, Joe Pernica of Ernst & Young Inc., said in court documents last week.
Krispy Kreme's hard times are a far cry from the heady days when the treat trumpeted its move north to Canada.
In 2000, KremeKo won the Canadian rights to the Krispy Kreme name. It was required to open 32 stores within seven years. And it had to pay Krispy Kreme $40,000 US for each as well as 4.5 per cent of sales.
When the first store opened in Mississauga, Ont., in 2001, Krispy Kreme's customers lined up in eager anticipation, and were happy to shell out $70,000 for opening day doughnuts.
But by January 2005, KremeKo had fallen on hard times and had closed six of its 18 stores in Canada.
Things were also tough south of the border. North Carolina-based Krispy Kreme's once-rosy financial fortunes began dimming in the spring of 2004, when it reported its first quarterly loss, placing much of the blame on the rising popularity of low-carbohydrate diets.