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January 04, 2005
More bad news for Krispy Kreme
Krispy Kreme, a word-of-mouth marketing and customer evangelism phenomenon the past few years, has the opposite problem now: bad buzz about its operations and financial management.
A story today says a shareholder lawsuit claims a company manager ordered channel stuffing, or double shipments, be sent to retailers and wholesalers to "boost the sales for the fiscal year in order to meet Wall Street projections."
An SEC document says the company has guaranteed $52.3 million in franchisee debt; it warned that if it is forced to honor those guarantees, it may not have enough cash on hand to continue operations. The document also says the company's financial troubles are preventing it from borrowing money.
When will the bad news stop? A continual trickle of bad news is worse than a complete and thorough mea culpa. Krispy Kreme customer evangelists are probably eager to help, but that will require the company to open up about what happened and why, who's responsible and what will change.
Keeping bad news under wraps is futile. Control is futile. Open up!
UPDATE: Zane Safrit writes a poignant essay about Krispy Kreme and what the company meant to him growing up in North Carolina.
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» More bad Krispy Kreme news from BusinessBits
Well, I told you earlier that Krispy Kreme really needed to turn around their image... quickly. It seems like they're heading downhill a bit more. Church of the Customer tells us all about their latest fiasco:
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