UPDATE 1-Krispy Kreme CEO resigns, chairman named to post

(Adds details on executives, company)

NEW YORK, Jan 7 (Reuters) - Krispy Kreme Doughnuts Inc (KKD.N) said on Monday that President and Chief Executive Daryl Brewster resigned for personal reasons and will be replaced by Chairman James Morgan. Morgan, a director of the company since July 2000, was most recently the chairman and chief investment officer of investment management firm Covenant Capital LLC, which he founded.

The company said Morgan's appointment is not temporary and that it expects him to serve as president and CEO for the foreseeable future.

Brewster, who will continue with Krispy Kreme till the end of the month, joined the doughnut chain in March 2006 from Kraft Foods Inc (KFT.N), where he served as the group vice president and as president of its North America snacks and cereals business, according to the company's Web site.

Once a Wall Street favorite, Krispy Kreme went public in 2001 with a successful offering but has struggled since 2004 with financial restatements, investigations into past accounting practices and a decline in doughnut sales that has sent some of its franchisees into bankruptcy.

The company said in December it expects franchisees to close a significant number of stores in the foreseeable future, a move that would hurt royalty and supply chain revenue.

(Reporting by Aarthi Sivaraman, editing by Steve Orlofsky)

((aarthi.sivaraman@reuters.com; +1 646 223 6191; Reuters Messaging: aarthi.sivaraman.reuters.com@reuters.net))

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