specializes in retail donut market and was founded in 1937 in North Carolina. Today, there are over 400 stores which employ 3,900 employees in 45 states and 4 countries. The company produces about 7.5 million donuts each day. The company is one of the leading producers of donuts and is ranked 4th of the top 100 chains in the U.S. (standing as of 2004). .

             The company owns and franchises Krispy Kreme doughnut shops and sells over 20 different kinds of doughnuts, including its Hot Original Glazed variety.

             Today, the company faces some significant challenges:.

             Changes in senior management.

             SEC investigations.

             Employees are suing the company over mismanagement of retirement funds.

             Changes in eating habits have affected the company"s revenue.

             In May of 2004, the Krispy Kreme stock fell almost 18 % because of changes in dieting habits, particularly the low-carbohydrate phenomenon. The sale of packaged donuts dropped dramatically. The company claimed this was impacting sales but analysts were skeptical because doughnuts are not thought of as "part of a diet", any diet. And changes in America"s eating habits, especially the health craze that seems to be the current pattern is likely to impact the sales of sugary and snack foods. Krispy Kreme doughnuts fall into both categories.

             Changes in senior management always make investors wary. In 2005, Stephen F. Cooper was named CEO replacing Scott A. Livengood, who has retired as Chairman of the Board, President and Chief Executive Officer and a director of the Company. He will become a consultant on an interim basis. Steven G. Panagos has been named President and Chief Operating Officer (press release, 2005). The company hopes this change will turn things around.

             In the company"s own words, "The Company also announced that the results for its fourth quarter ending January 30, 2005 have been, and may continue to be, adversely impacted by significant sales declines.