Krispy Kreme sees woes continue

Krispy Kreme has received another helping of bad news

Struggling US snack foods giant Krispy Kreme slid deeper into the red as second quarter losses grew to $27m (£13.3m) from $4.6m in 2006.

Shares in the doughnut maker fell 25% in reaction to the latest bad news to hit Krispy Kreme, which is in the midst of a restructuring operation.

Healthier eating trends were one of the factors blamed for declining sales.

Competition from rival Dunkin'Donuts and franchisees filing for bankruptcy have also damaged Krispy Kreme.

Past glories

Krispy Kreme is closing some outlets and selling a manufacturing site as it attempts to implement a turnaround plan.

But analysts have questioned whether this will be sufficient to save a name that has been behind glazed doughnuts since 1937.

John Ivankoe, an analyst with JP Morgan, said the company's short-term prospects were not appealing.

"Krispy Kreme is not yet in turnaround mode and we don't expect near term brand recovery," Mr Ivankoe said.