McD, Krispy Kreme said eyeing alliance for Japan. . Ltd.

NEW YORK -- Tokyo-based McDonald's Holdings Co. (Japan) Ltd., the 3,873-unit McDonald's group that is 55-percent owned by McDonald's Corp., may be finalizing plans to partner in Japan with Krispy Kreme Doughnuts, according to an analyst's report.

Mark Kalinowski of Salmon Smith Barney here said, "Our understanding of the possible partnership is that it would allow McDonald's Japan to begin opening Krispy Kreme shops in Japan."

McDonald's Holdings has been seeking strategies for reversing steep and prolonged same-store-sales declines resulting from Japan's severe recession and Japanese consumers' fears of mad-cow disease.

Anna Rozenich, a spokeswoman for Oak Brook, Ill.-based McDonald's Corp., said, "As a matter of practice, we don't comment on merger, acquisition and new business-venture activity."

Stan Parker, marketing chief of Winston-Salem, N.C.-based Krispy Kreme, also declined to comment on Kalinowski's report, Dow Jones said.

Kalinowski observed that Krispy Kreme recently had opened its first international store, in Canada, and has reached an agreement to open units in Australia. He said the doughnut-chain operator and franchisor was expected to announce plans for expansion into one or two additional international markets by January.