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Crumbs: From Neighborhood Cupcakery to Failed Chain

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Photo: m01229 / Flickr

After the announcement that cupcake chain Crumbs Bake Shop was unceremoniously closing all of its locations, it's hard to believe they were ever once considered a success story. And yet: At their peak, there were 70 Crumbs locations. According to photos in the tabloids, Crumbs were adored by celebrities from Selena Gomez to Hillary Duff to Tori Spelling. They were the first publicly traded cupcake company.

But rapid expansion and waning interest in the cupcake fad of the early 2000s have brought hard times to Crumbs. As money slowed to a trickle, at first they tried partnering with everyone from Starbucks to chef David Burke to the Girl Scouts to the NHL; later, they pinned their hopes on fads like push-up cakes (think push-pops, but cake) and knockoffs of Dominique Ansel's Cronut ("Crumbnuts," obviously). Now the company has decided to shutter all retail locations and focus on their grocery store game. Below, an of exploration the rise and fall of a New York City cupcakery.

crumbs-bw.jpg
[Photo: jaysantiago / Flickr]

2003

March: The first location of Crumbs opens on the Upper West Side of New York City. Cupcakes cost $2.95.

November: A second Crumbs location is in the works, this time on the Upper East Side.

2008

The Bauers, the couple who founded Crumbs, take on their first outside investor: Edwin Lewis, who pays them $10 million for 50%. At this point there are seven Crumbs locations, all in the NYC area.

2009

August: Crumbs has 25 stores and has plans to expand to "Boston, DC, Philly and South Jersey."

2010

May: Crumbs opens the first of five planned DC-area locations.

crumbs-chicago.jpg
Crumbs Chicago. [Photo: Crumbs / Facebook]

2011

crumbs-public.jpgJanuary: The company announces that it will go public after a $66 million merger with an investment company. According to the New York Times, the goal is to have 200 locations by 2014 (at this point they have 34 in six states). Cupcakes now cost $3.75 each. Founder Jason Bauer tells the Times, "If I had a nickel for every time someone asked me if cupcakes were a fad, I wouldn't need to do this deal."

June: Crumbs goes public at $13/share.

Early 2011: Crumbs opens its first Chicago location (above) as well launching its first airport stores (below).

May: Crumbs currently has 35 locations.

crumbs-newark.jpg
Crumbs Newark. [Photo: Crumbs / Facebook]

2012

crumbs-starbucks.jpgAugust: Crumbs announces a partnership with Starbucks, in which they will carry the coffee behemoth's products at their locations. This makes them the "largest United States retail partner of Starbucks' 'We Proudly Serve' coffee, tea, and espresso-based products," according to Alpha.

October: Crumbs completes a $9.8 million round of equity financing.

Late 2012: "[Hurricane] Sandy-related closures" were responsible for $700,000 in lost sales, according to an earnings report. This is also the first time the company hints locations may need to be shuttered for financial reasons.

December: Crumbs opens their first Philadelphia location (below).

crumbs-philly.jpg
Crumbs Philadelphia. [Photo: Crumbs / Facebook]

2013

April: Already down 22% from the year before, Crumbs' stock drops another 34% in one day and is trading at $1.70 per share. Cupcakes now cost up to $4.50.

stanley-cupcakes.jpg
[Photo: Crumbs / Facebook]

April: Crumbs partners with the NHL to promote the Stanley Cup by making Stanley Cup(cakes).

david-burke-crumbs.jpgMay: Crumbs announces a partnership with chef David Burke to serve sandwiches and salads in their New York locations in a bid to expand their audience.

September: The first-ever gluten-free Crumbs is announced and opens in October in New York City's Greenwich Village. "Now, those who live a gluten-free lifestyle will be able to enjoy the Crumbs experience," says then-CEO Julian R. Geiger in a press release.

gscupcakes.jpg
[Photo: Crumbs / Facebook]

October: Crumbs announces a collaboration with the Girl Scouts to produce Girl Scout cookie-inspired cupcakes. Flavors include Thin Mint, Caramel & Coconut, Chocolate Peanut Butter Creme, and Peanut Butter Cookie.

2014

Late 2013/Early 2014: A struggling Crumbs closes 15 locations.

crumbs-coffee.jpg
[Photo: Crumbs / Facebook]

January: Crumbs partners with White Coffee to make private label Crumbs-brand coffee and single serving coffee pods. They soon stop serving Starbucks coffee.

February: Crumbs partners with Pelican Bay Ltd., a company that produces bake mixes, to make "Crumbs Bake Shop premium cupcake mixes, hot chocolate kits, cupcake-in-a-mug kits and the first ever colossal cupcake kit."

crumbnuts.jpg
[Photo: Crumbs / Facebook]

April: Crumbs, now with 62 locations, announces that "We're modifying and retuning our objectives from opening stores to a franchise model, looking at product extensions, and licensing." This includes launching a Cronut knockoff called the Crumbnut, which will be sold in BJ's Wholesale Club locations. "I don't know that cupcakes by themselves are a big enough classification to run a substantial business on," CEO Ed Slezak tells Businessweek.

July: Nasdaq suspends trading of Crumbs because of "the company's failure to meet a requirement of either having at least $2.5 million in shareholder equity or meeting benchmarks for its market cap or annual net profit" on July 1. Crumbs closes all remaining 48 locations July 7. A spokesperson tells the Wall Street Journal, "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." Although it is unclear how many of Crumbs' 165 full-time employees and 655 part-time employees lost their jobs, many of them found themselves unemployed overnight.

· Cupcake Chain Crumbs Closes All of Its Stores [-E-]
· All Crumbs Bake Shop Coverage on Eater [-E-]

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