WINSTON-SALEM N.C. Krispy Kreme Doughnuts Inc. said today that president and chief executive Daryl G. Brewster has resigned for personal reasons after less than two years on the job. Krispy Kreme’s board elected chairman James H. Morgan to fill his positions.
The operator or franchisor of 411 doughnut shops said Morgan’s move was not an interim appointment and that he would assume Brewster’s positions “for the foreseeable future.”
Brewster’s resignation is the latest chapter in Krispy Kreme’s struggle to turn around its business after sales and profits began to slide in 2004. The company has been the subject of franchisee lawsuits and federal inquiries into its accounting practices.
Last year, Krispy Kreme caught up with its regulatory filing obligations, but the company has continued to report losses and several franchisees reported bankruptcy.
Steps to orchestrate a turnaround have included closing underperforming units, reducing corporate costs and opening units with smaller footprints to increase market penetration.
Morgan has been a director on Krispy Kreme’s board since 2000 and was elected chairman in 2005 following Scott A. Livengood’s resignation in 2005 amid the company’s legal and financial woes.
Morgan said in a statement: “I look forward to my expanded role with Krispy Kreme and to working with the company's management team and transformed board of directors to address the current challenges that face us as well as ongoing opportunities.
Brewster was named president and CEO of Krispy Kreme in March 2006, replacing interim leader Stephen F. Cooper, the chairman of turnaround firm Kroll Zolfo Cooper LLC. Previously, Brewster had led Kraft Foods Inc.’s snacks and cereals division for North America.
Krispy Kreme said in a separate announcement Monday that all of its menu items now have zero grams trans fat after several months of being tested in markets across the country.
Winston-Salem-based Krispy Kreme currently operates throughout the United States and 12 other countries.
