Boss' departure aids Krispy Kreme

Krispy Kreme is struggling to turn its fortunes around

Embattled doughnut giant Krispy Kreme has seen its shares jump more than 18% after it said it had parted company with chief executive Scott Livengood.

The US firm, whose earnings outlooks are under federal investigation, said Mr Livengood had retired as part of efforts to turn the company around.

At the start of this month Krispy Kreme admitted it was going to have to restate its 2004 earnings figures.

This came as a shareholder lawsuit claimed it had hidden falling sales.

The matter is also being looked at by the US Securities and Exchange Commission, which is further investigating Krispy Kreme's buyback of certain franchises.

'Vital efforts'

Krispy Kreme itself admitted at the start of January that it may have to reduce its 2004 earnings outlook by as much as 7.6%.

This came after the once-high flying company reported in November that it had made a quarterly loss of $3m (£1.6m), its second of 2004.

Krispy Kreme said Mr Livengood was retiring as part of "important actions to address the company's current situation".

He is to be replaced by Stephen Cooper, currently chairman of financial consulting group Kroll Zolfo Cooper.

A restructuring expert, Mr Cooper is credited with turning US energy firm Enron around after it came out of bankruptcy.

Krispy Kreme shares were up $1.44 at $10.16 at Tuesday lunchtime on the New York Stock Exchange.