Everything must go (including the customers)

For a long while, perhaps the only Krispy Kreme north of the Mason-Dixon Line was just outside of Philadelphia on U.S. Route 1 in Bensalem. It closed its doors years ago, but the Southern doughnut franchise eventually expanded into Philadelphia, promising 16 stores when it said it was coming into town in 2001. The Daily News wrote about 100 advertisements feature stories about the company, people lined up at 5 a.m. at the Roosevelt Mall location and Krispy Kreme was a sensation.

Fast forward to 2005, and all Krispy Kreme locations in Philadelphia have been closed. The company’s been in a dire financial situation for a while now, and the subsidiary that runs the Philly stores just filed for Chapter 11, citing $24.1 million in debts.

Usually when stores close, though, they have going out of business sales or they close during off hours. Yesterday, the Krispy Kreme location on Cottman Avenue closed while customers were waiting in line to buy doughnuts. Writes the Philadelphia Business Journal:

But a customer, Shanti Bacari of Philadelphia, said she was at one of the locations, 2327 Cottman Ave. in Northeast Philadelphia, at about 12:30 p.m. Monday when it closed abruptly.

About a dozen customers were trying to get inside and people waiting in the drive-thru line were turned away, she said.

Inside, customers continued to make purchases as it appeared a group of employees were holding a meeting, said Bacari, who was among those turned away.

With corporate strategy like this, somehow I’m not surprised Krispy Kreme’s Philly subsidiary has $24 million in debt.

Krispy Kreme down to zero Philadelphia stores [PBJ]