Nagle: Expand IBA’s Membership
Bolstering the rank and file of the Independent Bakers Association (IBA) will be the top priority for W. Dan Nagle over his next two years as chairman of the organization.
“Small- to medium-sized bakers need the IBA as a voice in Washington, D.C., to protect their interest,” Nagle says. “This is the premise upon which the IBA was founded almost 40 years ago. If we can accomplish that, we will make the IBA more relevant, vibrant and a stronger voice for the industry.”
Over the years, IBA membership has declined due to industry consolidation and because of mergers and acquisitions.
“My take, however, is that for every one of them who has left the industry, there have been 10 new bakers that have emerged,” says Nagle, partner with Nagle Kyle Associates.
In addition, the association’s top priorities include issues like health care reform, energy costs and passage of the Central American Free Trade Agreement (CAFTA).
IBC’s Losses Mount From Restructuring
The red ink is piling up big time as Interstate Bakeries Corp. (IBC) closes bakeries, eliminates jobs, trims routes and closes distribution centers in a widespread restructuring of its business to eventually return to profitability.
For the four weeks ending April 30, IBC reported its largest one-month loss of $24.1 million since the Kansas City, Mo.-based company filed for Chapter 11 reorganization back in September.
In a filing with the Securities and Exchange Commission (SEC), the company noted that sales rose to $265 million, which was the highest level since September, while operating expenses remained steady at $128.8 million. However, restructuring charges mounted to a whopping $35.8 million, putting its bottom line in the red.
Since April, the company has announced the restructuring of five of its 10 profit centers, including in the Northeast, Florida, the mid-Atlantic, northern California and southern California. It plans to close bakeries in Miami, Charlotte, N.C., New Bedford, Mass., and two facilities in San Francisco. With these closings, which should be completed by the end of summer, the producer of Wonder, Hostess and other baked goods will eliminate more than 3,500 jobs. The company is expected to announce further plant closings and job eliminations as it tries to complete the restructuring of its operations by the end of this year.
In other news, IBC announced that it reached an agreement with its lenders that will give the beleaguered company until the end of the year to file its quarterly and annual financial reports.
On the bright side, Interstate Bakeries began mounting a national television and consumer magazine advertising campaign to support its Bakers Inn brand, which was recently named a Top 10 “brand to watch” by Chicago-based Information Resources Inc.
The campaign, which runs from late June through October, is designed to enhance brand awareness among consumers looking for super-premium breads.
“With Bakers Inn whole wheat and wheat varieties proving a good or excellent source of whole-grain nutrition, the brand is exactly in step with the health trends of today’s consumers,” notes Bob Morgan, IBC’s executive vice president of sales and trade marketing.
Long Co. Conference to Address Consumer Trends
The Long Co. will discuss lifestyle trends that are directly influencing consumer demands at its annual conference, scheduled for September 16-18 in Chicago.
Topics of discussion include identifying product opportunities for the new health-conscious consumer, product ideas to meet the increasing Hispanic consumer demand, tips on managing government safety inspections and the U.S. Department of Agriculture’s MyPyramid Food Guidance System.
For more information, contact The Long Co. at 312-726-4606, ext. 253.
Krispy Kreme ‘Trumps’ Six Top Executives
Krispy Kreme Doughnuts pulled a Donald Trump and ousted six of its officers, including four senior vice presidents, following the recommendation of a special committee of independent directors that’s investigating potential improprieties by the company.
The officers worked in the areas of finance, operations, business development and manufacturing and distribution. Technically, five of the executives resigned while one retired.
The sudden removal of these executives raises new questions in the investment community about potential inappropriate actions at the uppermost level of the Charlotte, N.C.-based company.
The special committee was formed in October to investigate issues raised by the Security & Exchange Commission (SEC) and its auditors about Krispy Kreme’s auditing practices. In addition, a shareholder’s lawsuits allege that financial wrongdoings, such as hiding evidence of declining sales and profits, were committed by the company.
For years, financial analysts and industry pundits compared Krispy Kreme and its high-flying stock to the dot-coms and other companies that flew sky-high during the past decade and a half, and in the end, those prognostications may end up ringing truer than anyone believed.
During the last year, the producer of the famous, hot, glazed donut saw its stock crash because of soft sales, net losses, accounting irregularities, restating of earnings, shareholder lawsuits and SEC investigations into its franchise buybacks and earnings outlooks.
Moreover, Scott Livengood, chairman, CEO and architect of the so-called Krispy Kreme phenomena, was replaced by Stephen Cooper as CEO. Cooper, a turnaround specialist with Kroll Zolfo Cooper (KZC) and interim CEO at Enron, is being paid $760 an hour from Krispy Kreme in his new position. Steven Panagos, a KZC managing director, serves as the current president and COO. He receives $695 an hour. The two also receive reasonable out-of-pocket reimbursements.
According to published reports, Krispy Kreme has put its Canadian assets up for sale after being forced into protection from its creditors earlier this year.