Krispy Kreme apparently wants to focus on just selling doughnuts.
The Charlotte-based company on Tuesday said that it is exploring strategic alternatives for Insomnia Cookies, the late-night cookie brand it acquired in 2018, effectively putting the chain on the market after just five years of ownership.
Krispy Kreme said in a statement on Tuesday that the decision will “unlock shareholder value” and enable the company to focus on selling doughnuts.
“We acquired a majority stake in Insomnia cookies to build our e-commerce and digital capability as well as assist Insomnia’s U.S. and international expansion,” Mike Tattersfield, Krispy Kreme’s CEO, said in a statement. “Both efforts have been successful and it’s time for the next strategic step for both companies.”
(Read “Why you should not sleep on Insomnia Cookies.”)
The deal could put on the market a potentially valuable growth chain in Insomnia. System sales have nearly doubled since Krispy Kreme bought the chain. It now operates more than 250 bakeries in three countries. The chain generates average unit volumes of $850,000 on locations that are about 500 square feet.
Nearly half of the chain’s revenue comes through its digital channels. “We are now a sizable multi-channel enterprise but still have huge runway ahead in the attractive $700 billion indulgence industry,” Insomnia CEO Seth Berkowitz said in a statement.
Krispy Kreme has hired Evercore and Morgan Stanley as financial advisors.
Krispy Kreme, controlled by the European investment firm JAB Holdings, went public in 2021. The company’s stock rose to more than $19 per share after the IPO but has languished in the low teens since. It closed trading on Monday at below $12.5 per share.
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