Krispy Kreme Doughnuts Australia has entered voluntary administration, with the privately owned Australian arm of the American doughnut giant placed into the hands of Sydney accounting firm Smith Hancock.
Krispy Kreme Doughnuts first opened in Australia at its Penrith site in 2003, since then expanding to 54 Krispy Kreme outlets employing 660 staff in the 7 years since, the highest of any country outside America.
Krispy Kreme Australia spokesman Matt Horan told the Herald Sun that the company was placed into the hands of accountancy firm Smith Hancock after a directors meeting on Friday concluded the company was at risk of defaulting on creditors.
Directors of the doughnut icon attributed the slide in company profits to location, sales decline, high rents and distribution costs have lead to a number of Krispy Kreme stores bleeding money, according to the paper.
Smith Hancock will undertake an review of the company and its business in Australia over the next month, with Krispy Kreme stores to remain open during that time. Once the administrators have completed their review, unprofitable stores may be closed or sold off, but company spokesman Matt Horan has said all employee entitlements will be paid.
Krispy Kreme Australia, unlike the United States operation has no franchise stores and is a wholly owned private company, as part of the company restructure selling off stores and offering a franchise model to the Australian market is a distinct possibility.
