Wednesday, February 11, 2009

Homer Simpson's worst nightmare

Posted By on Wed, Feb 11, 2009 at 9:46 PM

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Among the 15 companies that U.S. News & World Report projects might not survive 2009: Six Flags, Loehmann's and — gasp! — Krispy Kreme.

According to the story:

Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans' appetite - and that's saying something. This chain overexpanded during the donut heyday of the 1990s - taking on a lot of debt - and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn't earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.

Just one question. WTF is "the donut heyday of the 1990s"?

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