NEW YORK: Krispy Kreme Doughnuts, facing a Securities & Exchange Commission investigation and declining stock price, has hired Gavin Anderson & Co. to handle its financial crisis communications.
Amy Hughes, communications director at Krispy Kreme, declined to comment on the ongoing investigation, citing legal restrictions. But she did say that the company was working with Gavin Anderson in relation to the case, which includes accusations of improper franchise agreements and falsely inflated profits.
Robert Mead, the head of Gavin Anderson's New York office, confirmed that his agency had been "recently retained" by Krispy Kreme, but declined to discuss details of its work.
"They're obviously involved in some significant litigation and other issues," Mead said. "My own approach, generally speaking, is to be very circumspect on this stuff."
Krispy Kreme works with LaForce & Stevens on entertainment and product PR, Hughes said. Calls to that agency were referred back to the client.
The doughnut company, considered a hot commodity on Wall Street only a year ago, has seen its stock fall from a high of nearly $50 in 2003 to its current price of around $10. Last week, Krispy Kreme announced that it was reducing its reported 2004 profit and that it might have to default on its credit line.