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 deKreme.
For lowly doughnuts, Krispy Kremes have attracted a high-powered following. President Clinton had them delivered regularly to the White House until his fitness advisers heard about it. “He used to eat them by the box,” says company spokeswoman Isabelle Kellogg. And when Los Angeles producer Tony Richards arrived home last week to discover that a friend had dropped off two boxes of the company’s coveted Original Glazed, he quipped: “It’s like I walked in and found a naked woman waiting for me!”
Since opening his shop in La Habra last January, owner Richard Reinis has sold more than 12 million doughnuts to 2 million customers. Proudly, he ticks off the stars who have made the trek to his store–Sarah Jessica Parker, Julia Roberts, Rosie O’Donnell. Soon he will no longer be alone. The state’s second outlet–part of a 42-store expansion planned for California alone–opens next week as a 4,000-square-foot, 120-employee, 24-hour doughnut supershop in Van Nuys, an L.A. suburb. At 170 calories and 10 grams of fat, you’d think the Krispy Kreme wouldn’t survive in our guilt-ridden, health-conscious society. Fat chance. For Krispy Kreme, there’s only one big question. It’s one thing to buy a doughnut, another to buy into them. Will investors bite?
