Cupcake Bubble Bursts: Crumbs Shutters All Its Stores

Earlier this week, NBC News reported that Crumbs, the beloved – though financially beleaguered – national chain of cupcake shops, had shuttered all its stores, laid off its entire workforce and filed for Chapter 7 bankruptcy protection.  For some time, Crumbs has suffered under a heavy debt load incurred during the New York-based company’s rapid national expansion, but weakening sales in recent quarters seem to have been the final blow.

In an interview broadcast on CNBC Squawkbox, Tim Love, chef and star of CNBC’s new reality series, “Food Startup,” acknowledged Crumb’s overly aggressive expansion and high cost structure as two of the key elements in the company’s struggles. However, he also pointed to the chain’s dependence on too-trendy a premise for the primary foundation of its business. “In the food world,” Love remarked, “you need to start a business based on [foods] that are successful and that people like over time.”

While Crumbs’ management may have brought their poor financial results upon themselves, we can’t help but still be sad about the news. Along with its smaller rival cupcake chain, Sprinkles, Crumbs has always brought an unmistakably artisanal element to its cupcake offerings that distinguish the chain not only from most coffee-shop brands, but many of the best-known local cupcake bakers, as well.

At their best, Crumbs’ signature varieties – flavors like ‘Blackout,’ ‘Caramel Macchiato,’ and ‘Milkshake’ – acquired ardent fan-bases among large numbers of discriminating consumers even amidst the avalanche of designer confectionary stylings that have cropped up during the height of the great Cupcake Bubble. Crumbs’ quality was consistently good and fresh, and the company’s spotless shops always rewarded a visit.

However, Crumbs fans do have some reason to stave off complete despair. While things certainly don’t look good for the chain, rumors are rampant that celebrity investor Marcus Lemonis is trying to organize some sort of financial bailout for the company.  So cupcake lovers should cross their fingers; you may not have seen the last of your jimmied and buttercream-covered faves …

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