Biggest US cupcake chain closes all stores
NEW YORK CITY - Cupcakes still lined the counter of an empty and unlit Crumbs Bake Shop on 42nd Street in New York City on Tuesday (July 8) afternoon, the day after the largest U.S. cupcake retailer announced it was closing.
Near the Times Square area, the disappointment was palpable to former patrons of Crumbs.
"I liked how big they were," said cupcake lover Frankie Garcia Tunon. "They were soft and delicious. It was a good cupcake, sad to see."
"They just vanished out of nowhere, it's like they're never going to call, never going to write, they're just gone forever and I guess I'm going to have to live with that now but I'll miss them," said Teresa Tobin.
Crumbs, which specializes in oversized cupcakes and went public in 2011, shuttered its nearly 50 locations in 10 states and the District of Columbia.
The news follows less than two weeks after the NASDAQ announced it would stop trading Crumbs, which hoped that the frosted cake, made famous by Magnolia Bakery in New York City and "Sex and the City", could fuel growth as a nationwide chain.
Crumbs had seen a steep decline in profitability since its debut on the market. In its quarterly report from March, the company posted an accumulated deficit of $28.8 million (USD).
Jim Lonergan was surprised at the company's shuttering.
"Everyone thought it was a good chain, but no one knew behind the scenes that they had so much debt they couldn't run their business," he said. "So like any business, you have to make money, you're not making money you close, and that's obviously what happened to them."
The Crumbs bankruptcy was an unusual setback for the humble dessert which has experienced something of a boom over the last decade.