Bitter End: Crumbs Cupcake Shop Calls It Quits

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A woman grabs a napkin to wipe the crumbs from her mouth at a Crumbs Bake Shop in Times Square in New York
Richard Levine/Alamy
NEW YORK -- Crumbs says it is shuttering all its stores, 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 couldn't 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 hadn't been updated with notification of the closures late Monday.

Crumbs was founded in 2003 and went public in 2011, selling giant cupcakes in flavors including Cookie Dough and Girl Scouts Thin Mints. More recently, however, it had been suffering from a steep decline in sales. For the three months ending 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.

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.


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136 Comments

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WildMtHoney888

When you only sell one thing with many vairaions expect to be a flash in the pan. Can anyone name one franchise that sell more than coffee, muffins and donuts? Now there is a business model that crumbs should have followed. Get them in with a breakfast or lunch special and make your cupcakes smaller. You will move more cupcakes. More so if you have a batch cooking in kitchen when they place an order for food.

July 09 2014 at 10:46 AM Report abuse rate up rate down Reply
Joe

Relocate to Washington or Colorado. The new pot smokers will soak up those cupcakes quicker than you can frost them.

July 09 2014 at 3:53 AM Report abuse rate up rate down Reply
tsh85

I have lived in Southern California my entire life, and gourmet cupcakes that cost $6 are a thing of the past. Like any trend, they have worn out their welcome. Whenever I go to LA, what I see popping up on every corner are yoga studios and organic juice shops. People are trying to lose weight and get healthy, and gourmet overpriced bakeries do not fit into that equation. I remember reading somewhere that the owner of Crumbs said his franchise was over 15 million dollars in debt, and he lost 8 million dollars last year alone. Anybody that would invest anywhere near that amount of money in a trendy bakery deserves to go broke. Sprinkles will be the next overpriced trend that will go bankrupt. Their cupcakes taste even worse than Crumbs. Pinkberry will also go belly up soon. Nobody wants to pay $6 for a cupcake or $9 for a frozen yogurt.....not even in Los Angeles!

July 09 2014 at 3:03 AM Report abuse +1 rate up rate down Reply
hairdisc

...and that's the way a cookie crumbles, or cupcake

July 09 2014 at 2:39 AM Report abuse rate up rate down Reply
IN MY OPINION ONLY

Sorry to say that Evergreen International is in Bankruptcy now.

July 09 2014 at 1:54 AM Report abuse rate up rate down Reply
IN MY OPINION ONLY

The White House will file for Bankruptcy, make sure to hold Obama responsible! I'll buy the Air Force one 747 for $1 dollar a piece all three of them for $3.00 and get Evergreen International in McMinnville OR to charter it out for me.

In my Opinion.

July 09 2014 at 1:53 AM Report abuse rate up rate down Reply
IN MY OPINION ONLY

Never heard of it so it's nonsense.

July 09 2014 at 1:51 AM Report abuse rate up rate down Reply
frank1946

USA is next.

Economy Sucks !

July 09 2014 at 1:03 AM Report abuse -1 rate up rate down Reply
ISpeakOnlyTRUTH

Why are many of you complaining at a $6 cupcake when you'll go to Starbucks and pay over $5 for a cup of coffee?

Y'all are a bunch of suckahs!

July 08 2014 at 10:50 PM Report abuse +1 rate up rate down Reply
ron

The business was Crumbling to pieces !! :-)

July 08 2014 at 8:37 PM Report abuse rate up rate down Reply