I think many of us here were really excited when Krispy Kreme came to Hong Kong about 2 years ago. I’ve been a regular ever since and I would visit any of their branches at least once a week. Unfortunately, unlike the US, Krispy Kreme here did not pass out free donuts while you line up … and I’ve always thought that an original glaze at HKD 10 (~ USD 1.3) is a little on the expensive side. I wonder if they would’ve done better pricing their donuts at a cheaper price. Can anyone remind me how much a Krispy Kreme donut in the States cost?
Funny thing was, I’ve always thought that business was doing well for them … but in retrospect, I don’t recall seeing many customers at any of the Krispy Kremes.
Here’s the article on from today’s newspaper, The Standard:
High Rents Blamed as Hole Blown in Doughnut Dream
Nickkita Lau and Timothy Chui
The Hong Kong franchisee of US doughnut giant Krispy Kreme is on the verge of closing all its outlets in the city.
Five of its seven stores – managed by Australian brothers Wayne and Brian Parfitt who bought the Krispy Kreme franchise two years ago – were closed yesterday.
Only two at the airport remains open, leaving a two-week window as management looks for a buyer. More than 120 people may lose their jobs.
One employee said she was surprised when notified about the closure yesterday morning because business had been fine the night before.
The local franchisee placed itself in voluntary liquidation.
The independent financial advisor appointed by the franchisee to help place the company into voluntary liquidation, Stephen Bricose, blamed the failure on high rents in places such as Causeway Bay and Mong Kok.
He said a buyer had not been found over the past six months despite strenuos efforts.
Briscoe said employees had been paid up to the end of last month. He did not have a concrete figure on how much debt the company had.
A meeting of creditors will be held on November 12 to appoint liquidators to deal with the assets and the claims of employees and creditors.
At least 12 Krispy Kreme employees have so far sought assistance from the Labour Department.
Krispy Kreme is the second-largest doughnut chain in the United States.
The Parfitt brothers also had the Macau franchise and had planned to open 20 outlets in five years.
The first branch opened in Causeway Bay in August 2006 and its international reputation attracted long lines.
The failure of Krispy Kreme has not deterred all owners of foreign franchises.
Ray Fung, operations manager of Canadian fast-food chain New York Fries, whose first branch in Hong Kong will open next month, said past experience has shown fast-food outlets are not especially sensitive to recessions.
“During recession, people typically spend less on luxury goods such as shark’s fin, but consumers will always want their comfort food, and fast food is an indulgence that doesn’t exactly break the bank,” he said.
The franchisee of two branches of American chain Burger King said it will continue with its plan to expand despite the financial turmoil.
According to an industry source, local eatery Cafe de Coral is planning to expand its network to 30 outlets …
RIP Krispy Kreme Hong Kong. To quote the bankers on Wall Street, “It was fun while it lasted” … I don’t know what I’ll do without you man. Is Hong Kong not ready for Krispy Kreme? The thing is, if its not ready now … I don’t think it ever will be.
Filed under: Central, Hong Kong | Tagged: Culture, Donut, Food, Hong Kong, Krispy Kreme, Restaurant, Restaurant Review, Review | 3 Comments »