CHARLOTTE, N.C. – Krispy Kreme, after years of financial losses and store closures, is once again expanding, with up to 25 new stores proposed nationwide through the end of next year.
The expansion marks a change of course for the 75-year-old Winston-Salem, N.C.-based chain.
Krispy Kreme hopes to tap into customer loyalty as it plots its comeback. After a period of strong growth, the company ran into financial troubles stemming in part from legal problems and a tough economy. It eventually closed more than half of its stores.
Now the company is recording profits again and is ready to expand, said spokesman Brian Little.
Krispy Kreme’s earnings suffered from a 2005 lawsuit that accused former management of hiding evidence of dropping sales and profits. The company had to shell out $4.75 million to settle the case.
Healthy living trends and competition from other chains, such as Dunkin’ Donuts and Starbucks, also took a toll. More than 240 U.S. stores closed between 2004 and 2009, according to securities filings.
With such a decrease in its U.S. presence, the company turned to international markets, where it has since begun growing in places like Japan, Mexico, the U.K., South Korea and the Middle East.
Since 2010 the company has been in the black. Last quarter, the corporation reported a net income of more than $6 million.
News Corp. board approves planned split
LOS ANGELES – Rupert Murdoch’s News Corp. said Thursday that its board has approved a plan to split into two companies, one containing struggling newspaper and book publishing businesses and the other comprising faster-growing entertainment operations.
Murdoch will serve as chairman of both new companies and CEO of the entertainment company. The Murdoch family, which controls nearly 40 percent of the voting shares in News Corp., is expected to maintain control of both companies.
News Corp.’s board unanimously approved the split in principle. It will take a more formal look at the details in coming months. The separation is also subject to regulatory approval and is expected to take about a year.
Investors have already applauded the change. Since news of the split broke early Tuesday, News Corp. shares are up 9 percent. They slipped 32 cents, or 1.4 percent, to $21.99 on Thursday.
Maker of Blackberry posts falling returns
TORONTO – Struggling BlackBerry maker Research in Motion Ltd. revealed Thursday that its business is crumbling faster than thought.
The Canadian company posted worse results for its latest quarter than analysts had expected. It’s cutting 5,000 jobs and delaying the launch of its new phone operating system, BlackBerry 10, until after the holiday shopping season.
The jobs cuts are part of a previously announced initiative to cut $1 billion in annual costs this year. They represent about 30 percent of RIM’s workforce, which is currently 16,500.
RIM shares plunged $1.66, or 18 percent, to $7.47 in extended trading after the release of the results. If they hold that level into regular trading Friday, they will set a new nine-year low.
RIM lost $518 million, or 99 cents a share, in its fiscal first quarter, which ended June 2. This compares with a profit of $695 million, or $1.33 per share, a year ago.