Top Krispy Kreme executive quits group

The turmoil at Krispy Kreme deepened after the doughnut maker said yesterday its chief operating office had quit.

The turmoil at Krispy Kreme deepened after the doughnut maker said yesterday its chief operating office had quit.

The departure of John Tate comes just days after the company disclosed that US federal regulators had launched an inquiry into its earnings guidance and franchise operations.

The former Wall Street darling admitted it had been too hasty in declaring itself immune to the Atkins craze when it reported its first quarterly loss in May and issued its first profit warning since it floated four years ago. Krispy Kreme has recently embarked on a costly programme to reacquire its franchises - many from executives and other insiders.

The company said Scott Livengood, the chief executive, would take over Mr Tate's duties. Mr Tate, 54, will step down next month to take up a job in Northern California at the furniture retailer Restoration Hardware.

He is thought to have engineered the group's unsuccessful acquisition of the Montana Mills bakery stores, which are being sold less than 18 months after it was purchased.

His departure further unnerved investors and shares in Krispy Kreme fell. The company has lost almost two-thirds of its market valuation this year. "We appreciate all of John's contributions to Krispy Kreme over the last four years," Mr Livengood said.

Surveys in the US have suggested waning enthusiasm for low-carbohydrate diets, prompting some analysts to query whether Krispy Kreme is seeking a scapegoat in blaming falling sales on the Atkins craze.