Krispy Kreme hopes ice cream will heat sales

Krispy Kreme's signature glazed doughnuts may be best hot, but its sales have been anything but in recent years. Now the chain is hoping that going cold – with its new soft-serve ice cream – will be the catalyst it needs.

The company has been trying to revive its sales for nearly three years, amid a health craze that made its glazed doughnuts an indulgence that many just couldn't stomach.

Now industry watchers say Krispy Kreme Doughnuts Inc.'s latest turnaround plan, which includes launching the new ice cream as well as opening smaller stores and expanding overseas, still may not be enough to help the chain climb out of its hole.

“They're trying to reposition themselves as more of a treat concept” that offers consumers desserts and indulgences, said Bob Goldin, executive vice president at food industry research firm Technomic. But “it'll be hard to argue it's a growth business” given trends toward eating healthier, he said.

The Winston-Salem-based company replaced its chief executive with its chairman, James Morgan, in January to try to revitalize the management team. That followed years of losses as the company attempted to recover from allegations of mismanagement, bankruptcy filings of its franchisees and the resurgence of competitor Dunkin' Donuts.