Magazine article Newsweek

A Tasty Stock Offering: Bill Clinton Loves Them. but Will Wall Street?

Magazine article Newsweek

A Tasty Stock Offering: Bill Clinton Loves Them. but Will Wall Street?

Article excerpt

The Krispy Kreme Doughnut Corp. has a new way to raise dough. The red-hot chain of retrodoughnut shops is planning to go public. Never mind that its menu isn't exactly dietetically correct. The company's devoted (if not outright cultish) following and aggressive growth plans have whetted Wall Street's interest in its first stock offering, anticipated early next year. Since its founding 60 years ago in Winston-Salem, N.C., Krispy Kreme has been a staple in the South. But in recent years it's become a fast-growing franchise--with 147 stores, at last count--that's drawn aficionados from New York to California to its hot, fluffy, 50-cent treat. "I've come here when there were about 65 cars at the drive-through and who knows how many dozens of people waiting at the counter," says Lou Huesmann, a pastor at Grace Brethren Church in Long Beach, Calif., who recently drove 35 miles to La Habra, the state's only outlet, for a fix of one of his favorite snacks. The lines? Who cares, says he. "It's great fun, because everyone talks to one another about their first Krispy Kreme experience."

Few people talk that way about Dunkin' Donuts, the world's largest doughnut chain. With nearly 5,000 shops in 37 countries, it generates 10 times the sales of Krispy Kreme, which rings up $238 million in revenues. Krispy's sales rose 18 percent last year, compared with Dunkin' Donuts' 6 percent. And Krispy Kreme has ambitious expansion plans. It aims to open more than 500 new shops nationwide over the next seven years--an unappetizing prospect to the biggies, who worry that size and a big financial cushion might be no match for, well, what might best be described as a passion de Kreme. …

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