Business Blooper: When the 'Hot Donut' Light Went Out

There are brands built around a product. And then there are brands built around a feeling. Krispy Kreme was always the second kind.

On April 5, 2000, Krispy Kreme Doughnuts went public on the NASDAQ under CEO Scott Livengood, launching one of the most anticipated food IPOs in American history. The stock hit $50 a share and split twice. What followed was an aggressive expansion from 95 stores in 11 states to 367 stores in 38 states, plus international markets, combined with a push into gas stations, supermarkets, and convenience stores that stripped the brand of the scarcity that had made it magnetic for sixty years. By 2005 the stock had collapsed to under $5, the company had filed for bankruptcy protection, and the SEC had opened an investigation into accounting irregularities that eventually resulted in settlements with three former top executives. The brand that had been built on the promise of a warm doughnut you had to seek out had become just another product on a shelf.

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