Crumbs Bake Shop (2003-2014?)

Among the pictures I found when I looked at the still-there Crumbs website today was this one, which originally I thought was too heartbreaking to reproduce. Then I thought it would help us remember all those people who found out suddenly this week that they were out of work. If it's any comfort to the young lady on the far right, it wouldn't have made any difference if she'd had her Crumbs cap for the photo.

by Ken

Okay, it may be premature to write an obituary for Crumbs Bake Shops. The NYT's Sydney Ember is now reporting: "Crumbs Cupcakes May Live Another Day."

It’s not over for the Crumbs cupcake yet.

When Crumbs Bake Shop said on Monday that it was shutting all of its stores, dessert aficionados lamented the loss of their frosted confection. Loyal customers rushed to see if they could buy a final dozen. Someone bid $255 for a Crumbs cupcake listed on eBay.

But by Thursday, Crumbs was said to be close to securing financing from a group of investors including Marcus Lemonis, the chairman and chief executive of Camping World and Good Sam Enterprises and star of the CNBC reality show “The Profit,” about saving small business.

According to CNBC, Mr. Lemonis is teaming up with Fischer Enterprises, which bought Dippin’ Dots out of bankruptcy in 2012, to provide financing that could eventually lead to a deal to buy the company.

I was a little surprised at all the coverage Crumbs's sudden shuttering got, though I suspect that some of the coverage had to do with that suddenness -- here today, gone tomorrow, or more likely, for the employees, at least, here today, gone today, since I assume the employees weren't entrusted with the information that it was their last day until it was their last day. Anyway, that's the way successive waves of downsizing have been handled at my place of business. Clearly people in higher places knew well before than that it was happening; it just wasn't deemed news suitable for sharing until the day the ax fell. Hey, it's not as if those peoples' lives were about to be drastically changed. Oh, wait . . . .

I was pleased to see that in the death-of-Crumbs coverage reasonable attention was paid to the suddenly-unemployed employees. When I looked at the Crumbs website, among the pictures I found was the one I wound up putting atop this post. My original thought was that it would be too painful to reproduce. I didn't stop in my nearby Crumbs outlet often, but when I did, the people were always pleasant, and it's hard for me to think of them as suddenly out on their keisters.

Crumbs's frosted black-and-white

Of course the dominant theme of the death-of-Crumbs coverage was the Death of the Cupcake Craze. I don't know if it really is that, though I wouldn't be heartbroken if it is, since I've been a spectator rather than a participant. As I've said here a number of times, my idea of a cupcake is TastyKake. It wasn't cupcakes I bought when I patronized Crumbs, it was their frosted black-and-white. When they were out of the frosted black-and-whites (my frosted-black-and-white cravings tend to come late in the business day), I could make do with the regular iced black-and-white, though it really wasn't anything special. Once or twice I ventured into the brownies.


IN HAPPIER TIMES, CRUMBS BOASTED --

Crumbs Bake Shop first opened its doors in March of 2003 on the Upper West Side of Manhattan. The menu is an irresistible blend of comfort-oriented classics and elegant baked goods, but the specialty of the house is the Crumbs Signature size cupcakes!

With our more than 50 varieties baked fresh daily and a new cupcake of the week every Monday, each Crumbs Bake Shop is an oasis of wall to wall deliciousness.

And now you can enjoy your favorite Crumbs treats in the comfort of your own home - just like Mom used to bake.

Delivered straight to your front door, perfect for a cupcake party, or without needing any occasion at all.

SO IS THE DAY OF THE CUPCAKE PAST?

That may be premature. As of this past March, we know, the Sprinkles chain seems still to have been thriving. Or at any rate the Sprinkles folks garnered massive publicity for their opening of NYC's first cupcake vending machine. The stories about Crumbs's apparent demise did detail the company's rapid history of expansion, and you have to wonder just how smartly the company was managed.

As the NYT's Sydney Ember reports (links onsite):

The company went public on the Nasdaq stock market in 2011, at the height of the gourmet cupcake craze, through a $66 million merger with an investment company, the 57th Street General Acquisition Corporation.

When the company went public, it had 34 stores in six states. Mr. Bauer said at the time that he planned to expand to 200 stores by 2014.

But as other high-end cupcake stores began expanding across the country, the market became oversaturated.

With its revenue declining even as it continued to open stores, the company reported a loss in 2013 of $18.2 million, on top of the $10.3 million loss it posted in 2012, according to filings with the Securities and Exchange Commission. As of March 31, the company operated just 65 stores across 12 states and in Washington and was continuing to close ones that were not performing well.

The Nasdaq suspended trading of the company’s stock on July 1. In its filing with the S.E.C., Crumbs said the Nasdaq had based its decision to delist the company on its failure to comply with a minimum stockholders equity requirement of at least $2.5 million.

WELL, THAT'S THE THING ABOUT CRAZES!


You'd think it wouldn't take hindsight to see that the pace of expansion contemplated by Crumbs was majorly overly ambitious, given the combination of a market surely was likely to peak sooner rather than later, especially given how ambitiously it was being served.

But isn't this only to be expected when you hitch your wagon to a craze. After all, crazes are, more or less by definition, simply c-c-c-crazy! If you have ambitions to make a financial killing in a "craze market," you had best be in that market early, ideally with a solid get-away plan in place.

The outpouring of grief at Monday's news suggests that Crumbs was in fact doing something right. Can it be brought back from the grave? Do the current dickerers really have that much keener a vision for serving the cupcake public than the old Crumbs management? I guess we'll see.

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