02-18-2011, 05:34 AM
Ah, "The Tale of The Krispy Kreme Manufacturing and Distribution Plant in Effingham" is a tale filled with high hopes of bringing good paying jobs to a community that didnt even qualify for its own Krispy Kreme store.
It all began in 2001 when K.K.s main production facility in Harlem, S.C. was working 24/7 trying to keep up with orders from all the K.K. stores including the newer ones that had been rolled out after K.K. "went public" on the stock exchange. and wasnt that a big success, the stock just kept rising and rising just like donuts in the proving machine in one of the stores. So K.K. arranged for a firm to make a search for suitable locations that were favourable in terms of distance from bulk supplies of raw materials by truck and by rail, and distance to distribution zones by truck. The fact that Effingham was offering build in subsidies in conjunction with the Illinois State Government Tax Credits, as well as having a shortline which could offer cheaper rail costs and switching fees clinched the deal. So K.K. spent about $35 million to purchase about 30 acres of the Business Park site and had a custom built factory errected.
We now have the ingredients for the plants ultimate demise present. The high profile rollout of new stores would eventually start coming unstuck as incrimental sales declined and costs rose. This was viewed with much displeasure by the Wall Street and so the stock price began to slide, which ramped up the pressure at head office. Following an unrelated firms bankruptcy and disclosures of "synthetic leases". [which are leases that by some miracle didnt appear on a firms balance sheet] in a funny money kind of way, the "Wunder Kids" of Wall Street began searching for more of these type of leases.
Can you guess where they found one or more???? Yep at Krispy Kreme and the biggest lease of them all was the one for the Effingham Manufacturing and Distribution Plant.
So short of cash and running before the Wall Street Bulls they well basically
gave the plant the bullet, put @ 70 people out of work and took a big hit financially when they only managed to sell the plant [to Harlan Bakeries] for about $14 Million. 
Here endeth this sad sad tale
Mark
It all began in 2001 when K.K.s main production facility in Harlem, S.C. was working 24/7 trying to keep up with orders from all the K.K. stores including the newer ones that had been rolled out after K.K. "went public" on the stock exchange. and wasnt that a big success, the stock just kept rising and rising just like donuts in the proving machine in one of the stores. So K.K. arranged for a firm to make a search for suitable locations that were favourable in terms of distance from bulk supplies of raw materials by truck and by rail, and distance to distribution zones by truck. The fact that Effingham was offering build in subsidies in conjunction with the Illinois State Government Tax Credits, as well as having a shortline which could offer cheaper rail costs and switching fees clinched the deal. So K.K. spent about $35 million to purchase about 30 acres of the Business Park site and had a custom built factory errected.
We now have the ingredients for the plants ultimate demise present. The high profile rollout of new stores would eventually start coming unstuck as incrimental sales declined and costs rose. This was viewed with much displeasure by the Wall Street and so the stock price began to slide, which ramped up the pressure at head office. Following an unrelated firms bankruptcy and disclosures of "synthetic leases". [which are leases that by some miracle didnt appear on a firms balance sheet] in a funny money kind of way, the "Wunder Kids" of Wall Street began searching for more of these type of leases.
Can you guess where they found one or more???? Yep at Krispy Kreme and the biggest lease of them all was the one for the Effingham Manufacturing and Distribution Plant.
So short of cash and running before the Wall Street Bulls they well basically
gave the plant the bullet, put @ 70 people out of work and took a big hit financially when they only managed to sell the plant [to Harlan Bakeries] for about $14 Million. Here endeth this sad sad taleMark
Fake It till you Make It, then Fake It some More