Crumbs Stayed Afloat Long After the Cupcake Bubble Showed Signs of Bursting

Moneybox
A blog about business and economics.
July 8 2014 1:22 PM

Death Comes to Crumbs Bake Shop

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So long, Crumbs cupcakes.

Photo by m01229 via Flickr

While the future of potato salad looked bright on Monday, America's sugary cupcake high officially crashed to earth when Crumbs Bake Shop announced that it was closing all of its stores. It was the end to a short-lived run for the gourmet bakery, which went public three years ago on the heels of a massive cupcake boom but had struggled lately to stem losses and turn around underperforming stores.

"Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its devoted employees while it evaluates its limited remaining options," a spokeswoman for Crumbs told the Wall Street Journal in a statement. Crumbs will close its remaining 48 stores across 10 states. It shuttered half a dozen earlier in the year after posting an $18.2 million loss in 2013. The Nasdaq Stock Market suspended trading of Crumbs shares on July 1.

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It's certainly possible that the cupcakes themselves—and not just the product idea—were part of what did Crumbs in. The 4-inch cupcakes were expensive at $3.50 to $4.50 apiece and chock full of calories; a few bites might have felt like enough to induce a sugar coma. The company opened an exclusively gluten-free location in Manhattan last fall, but it failed to catch on. The "crumbnut"—a rebuttal to Dominique Ansel's "cronut"—also missed its mark. Slate's Jessica Grose suggests that our hatred of cupcakes might even be rooted in sexism.

Crumbs stayed afloat in the gourmet baking industry long after the cupcake bubble showed signs of bursting. Dan Gross wrote in Slate back in 2009 that he was skeptical of the cupcake boom for "historical, financial, and, ultimately, gastronomic reasons." Crumbs obviously didn't have the same hesitations—that was a full two years before its IPO. 

Alison Griswold is a Slate staff writer covering business and economics.

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