Krispy Kreme Doughnuts Inc (NASDAQ:DNUT) stock was on the front foot, up around 2% at $12.68, as the doughnut company said it was hoisting the ‘for sale’ sign over its 75% stake in the Insomnia Cookies brand.
It comes as Krispy Kreme seeks to focus on its core business - producing, selling, and distributing fresh 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,” said Krispy Kreme chief executive Mike Tattersfield.
“Both efforts have been successful and it’s time for the next strategic step for both companies.”
Tattersfield noted that Krispy Kreme is now present in 37 countries, selling doughnuts across 13,000 ‘access points’ and it now aims to expand to in excess of 17,000 sales points, entering a further three to five new countries each year.
Insomnia, which is set to generate $230 million in 2023, was paired with Krispy Kreme in 2018 when the doughnut company bought in.
The cookie firm is described as “a pioneer and industry leader in digital marketing and e-commerce revenue” as the around-the-clock baker makes 45% of its revenue through digital channels.
“It has been an honor to partner with Krispy Kreme in an unprecedented chapter of growth for Insomnia Cookies,” Insomnia founder and chief executive Seth Berkowitz said.
“As we enter our 20th year of delivering warm, delicious cookies, we are now a sizeable multi-channel enterprise but still have a huge runway ahead in the attractive $700 billion indulgence industry.
“I look forward to leading our Insomniacs in our next phase of significant domestic and global expansion.”