The famed doughnut chain got too chubby over the last 15 years, and it's been closing unprofitable stores to help reverse several years of steep losses. Revenue has plunged since 2005, but cutbacks helped the company turn a $1.9 million profit in the latest quarter. Lenders have provided a breather by easing some of their requirements over the last two years. The temporary reprieve expires in 2011. By then, the company hopes that streamlining, profitable new overseas stores, and other measures will have strengthened its finances.
Spokesman Brian Little points out that Krispy Kreme has cut its debt by nearly 40 percent and has a $21 million cash cushion. The recession, he adds, isn't as daunting to Krispy Kreme as to other food chains: "We sell an affordable indulgence consumers will purchase when they can't afford to treat themselves or their families to other luxuries."