Crumbs Collapses: Cupcake Chain Shuts Down All Locations
NEW YORK (CBSNewYork/AP) — Crumbs is shuttering all of its stores just a week after the struggling cupcake shop operator was delisted from the Nasdaq.
The New York City-based company said all employees were notified of the closures Monday. A representative for Crumbs could not immediately say how many workers were affected or how many stores it had remaining on its last day.
“Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its employees while it evaluates its limited remaining options,” the company said in an emailed statement. That will include filing for Chapter 7 bankruptcy liquidation.
A press release from its website in March listed 65 locations in 12 states and Washington, D.C. The website had not been updated with notification of the closures late Monday.
“I came to get some cupcakes for my son and all of a sudden I see it’s closed,” Upper West Side resident Noel Mercedes told CBS 2’s Tony Aiello.
“I went there today to get a cupcake. It’s a shame they had excellent coffee too! (Disappointed?) Disappointed, but I don’t know the cupcake craze, maybe it’s over?” said Upper West Side resident Robin Tendler.
New Yorker Jason Bauer started Crumbs in 2003 with his wife Mia, selling giant cupcakes in flavors including Cookie Dough and Girl Scouts Thin Mints. They sold half of their stake for $10 million just before the company went public in 2011, Aiello reported. In three years the stock tumbled from $13 a share down to 35 cents a share.
For the three months ending on March 31, Crumbs Bake Shop Inc. reported a loss of $3.8 million, steeper than the loss of $2 million from the same period a year ago.
The company had warned in a filing with the Securities and Exchange Commission this past May that it “may be forced to curtail or cease its activities” if its operations didn’t generate enough cash flow.
Crumbs struggled as consumers became more calorie and cost conscious. A single specialty cupcake had as many as 1,050 calories and a single specialty cake could set you back $34, Aiello reported.
“A lot of people are counting each penny and may not be willing to spend $7, $8, $9 for a cupcake right now when you could go without and maybe even reduce the waistline a little,” said business consultant David Selig.
As of the end of last year, Crumbs listed about 165 full-time employees and about 655 part-time hourly employees working in its stores.
“I’m emotionally frazzled, but at the end of the day I just want to put a smile on my customers’ face,” Crumbs employee Sandra Davis told Aiello.
The news generated a lot of commentary on our Facebook page.
“Cupcake fad over,” wrote Myra Garcia.
“Bummer. Who doesn’t love cupcakes?” wrote Andrea Perez.
“I’m sorry for the employees, but not surprised this has happened. For how many years have we been eating them? Like everything else, cupcakes were a fad food; I’m curious to see what’s next on the horizon,” wrote Rachel Corso Poland.
When Crumbs opened on the Upper West Side, it boasted a menu of an “irresistible blend of comfort-oriented classics and elegant baked goods.” The chain offered more than 50 varieties, each baked fresh daily and a new cupcake of the week every Monday.
Cupcakes came in three main sizes from the 1-inch “taste” to the 6.5-inch “colossal.”
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