PE-invested Krispy Kreme Australia sees restructuring after financial setbacks
Doughnut market leader Krispy Kreme’s poor financial performance in Australia, where it is invested by Souls Private Equity, has prompted a month-long management restructuring process aimed at jumpstarting the retailer’s profits.
Krispy Kreme, which is 24% invested by Sydney-based Souls, has appointed Mike Smith and Peter Hillig, both of accounting company Smith Hancock, to lead the restructuring, which is expected to produce layoffs. Krispy Kreme currently claims more than 650 employees across 50 locations in Australia - many of which are profitable, yet encumbered by a handful of underperforming branches, the company said in a release. Krispy Kreme further attributed its fiscal shortcomings to poor location, sluggish sales and high rent and distribution costs.
Souls Private Equity specifically invested nearly A$17 million (then $12.8 million) into the local arm of the US-based company in February 2006, according to the firm's website. Krispy Kreme first entered Australia in 2003.
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