Crumbs Bake Shop, Inc. announced it has closed all of its store locations. Recently the company reported a steep decline in sales, resulting in $4 million in losses.
The New York City-based company was founded by a husband-and-wife team, Jason and Mia Bauer in 2003 with one shop on the Upper West Side of Manhattan. A shell company bought Crumbs in 2011 and took it public that June, during the height of the gourmet-cupcake boom. Crumbs made its mark selling 4-inch, frosting-laden cupcakes in flavors such as cookie dough, girl scouts thin mints, caramel macchiato and red velvet cheesecake, costing generally $3.50 to $4.50 each. A single cupcake can top 600 calories.
Since then, its financial outlook has grown bleak amid several years of losses, a dwindling cash supply, and a food craze that is petering out. In March, Crumbs said it closed nine underperforming stores during the last three months of 2013, shut six at the start of 2014 and had more closures on the way.
The company had warned in a filing with the Securities and Exchange Commission this past May that it “may be forced to curtail or cease its activities” if its operations didn’t generate enough cash flow.
Crumbs said all employees were notified Monday that it would be closing all of its stores at the end of the business day. A representative for Crumbs couldn’t immediately say how many workers were affected or how many stores it had remaining on its last day. As of the end of last year, Crumbs listed about 165 full-time employees and about 655 part-time hourly employees working in its stores. According to the company’s website, Crumbs currently has 48 stores in 10 states and the District of Columbia.
“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,” the company said in a statement. Those options could include Chapter 7 bankruptcy liquidation, a spokeswoman for Crumbs said.