Krispy Kreme CEO resigns
By Aarthi Sivaraman
NEW YORK (Reuters) - Krispy Kreme Doughnuts Inc <KKD.N> said on Monday that President and Chief Executive Daryl Brewster had resigned for personal reasons after less than 2 years on the job and will be replaced by Chairman James Morgan.
Investors in the struggling doughnut chain, which has posted weak sales and persistent losses under Brewster's leadership, cheered the news and sent its battered shares up more than 10 percent in midday trading.
Morgan, a director of the company since July 2000, was most recently the chairman and chief investment officer of investment management firm Covenant Capital LLC, which he founded.
The company in a statement said Morgan's appointment is not temporary and that it expects him to serve as president and CEO for the foreseeable future.
Company spokespersons could not be reached for further comment.
Brewster, who will continue with Krispy Kreme till the end of the month, joined the company in March 2006 from Kraft Foods Inc <KFT.N>, where he served as the group vice president and as president of its North America snacks and cereals business, according to the company's Web site.
Since Brewster took the helm at Krispy Kreme, its stock has lost nearly 57 percent of its value, falling as low as $2.50 per share in December after hitting its 52-week high of $13.91 a share last January 24.
Once a Wall Street favorite, Krispy Kreme went public in 2001 with a successful offering. But its stock has taken a beating since 2004, as it faced financial restatements, investigations into accounting practices and a decline in doughnut sales that sent some franchisees into bankruptcy.
The company said in December it expects franchisees to close a significant number of stores, a move that would hurt royalties and supply chain revenue.
Krispy Kreme shares were up 9.2 percent, or 26 cents, at $3.09, after hitting an earlier high of $3.14 on the New York Stock Exchange.
(Reporting by Aarthi Sivaraman; Editing by Brian Moss)