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US cupcake chain Crumbs Bake Shop shuts stores | US cupcake chain Crumbs Bake Shop shuts stores |
(about 6 hours later) | |
US cupcake chain Crumbs has said it will shut all its shops, a week after its shares were suspended from trading on the Nasdaq index. | US cupcake chain Crumbs has said it will shut all its shops, a week after its shares were suspended from trading on the Nasdaq index. |
"Regrettably Crumbs has been forced to cease operations," it said. The firm said it was now evaluating "its limited remaining options". | "Regrettably Crumbs has been forced to cease operations," it said. The firm said it was now evaluating "its limited remaining options". |
Crumbs listed on the stock market in 2011 at the height of the cupcake boom. | Crumbs listed on the stock market in 2011 at the height of the cupcake boom. |
It had 65 shops in 12 states and Washington DC as of the end of March, according to its website. | It had 65 shops in 12 states and Washington DC as of the end of March, according to its website. |
Crumbs, which was founded in 2003, sold cupcakes in flavours such as red velvet cheesecake, peanut butter cup and cookie dough, with some of them containing more than 600 calories. | Crumbs, which was founded in 2003, sold cupcakes in flavours such as red velvet cheesecake, peanut butter cup and cookie dough, with some of them containing more than 600 calories. |
It sold the cupcakes in sizes varying from a one-inch taster cake to its "colossal" six-inch cake serving six to eight people. | It sold the cupcakes in sizes varying from a one-inch taster cake to its "colossal" six-inch cake serving six to eight people. |
Its fortunes began to decline as its cake sales slowed. | Its fortunes began to decline as its cake sales slowed. |
Crumbs reported a loss of $18.2m (£10.6m) last year, which came on top of a $10.3m loss in 2012. | Crumbs reported a loss of $18.2m (£10.6m) last year, which came on top of a $10.3m loss in 2012. |
The firm warned in May in an official filing that it "may be forced to curtail or cease its activities" if its operations did not generate enough cash flow. | The firm warned in May in an official filing that it "may be forced to curtail or cease its activities" if its operations did not generate enough cash flow. |
As of the end of last year, Crumbs listed 165 full-time employees and about 655 part-time hourly employees as working in its stores. | As of the end of last year, Crumbs listed 165 full-time employees and about 655 part-time hourly employees as working in its stores. |
Analysis - Michelle Fleury, New York Business Reporter | |
I should begin with a confession. | |
I often used to visit the Crumbs shop located a few blocks from the New York Stock Exchange. | |
Sometimes it was just to pick up cupcakes for a colleagues birthday. At other times, it was for a mid-afternoon sugary treat. | |
But these days I'm more likely to be tempted by a treat from a passing food truck. | |
The demise of the cupcake chain is a reminder that food trends - like fashion trends - pass. Anyone remember the once ubiquitous doughnut chain, Krispy Kreme? | |
In the case of Crumbs Bake Shop, it expanded too quickly. And with the barriers to entry so low, there was no shortage of competition. | |
Crumbs was unable to move beyond its giant cupcakes and it paid the price. | |
A shame - I'll miss my sugar fix on my way out of the stock exchange. |
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