Is the fad over? Cupcake firm Crumbs crumbles and shuts 48 stores
It looks like America’s decade-long cupcake craze might be winding down. This week Crumbs Bake Shop shut all 48 of its stores.
Eat one a day? That's too much
The frenzy had seen oddities like “treat-dispensing ATMs and a $42 “colossal” cupcake serving eight people” Bloomberg reported.
But Crumbs ran into reality, after initially planning to open 200 locations across the US, and instead struggled to expand beyond its New York home base
The company lost tens of millions of dollars and now faces default on more than $14 million in loans.
Crumbs had unique challenges, including the demands of being a public company, said Bloomberg. But the industry as a whole “faced a painfully crowded market for baked goods and was seeking ways to enliven a fad that’s lost its novelty.”
Sprinkles Cupcakes had opened 24-hour cupcake machines in six cities, aiming to give people a new reason to visit their stores. For most Americans, though, “the excitement may have run its course, ” said Bloomberg,
Neeru Paharia, an assistant professor of marketing at Georgetown University keeps an eye on a nearby cupcake firm in Washington.
She said ,“When you see something that gains adoption so rapidly, that suggests it might also decline rapidly,” she said.
“Demand doesn’t hold up over the course of the day; It peaks really early and crashes.”
Doughnut chains like Dunkin’ have proven their staying power, but their food is seen as more versatile.
“People are not going to eat a cupcake for breakfast,” said Peter Saleh, an analyst at Telsey Advisory Group in New York. “Eat a cupcake every day, and you’ll be dead.”
Two other chains, Sprinkles and Magnolia Bakery, say they’re avoiding Crumbs’ fate by expanding more slowly and trying new things.“We’ve been mindful of where and when we’ve expanded.”
Crumbs was hailed as a “breakout company” by Inc. magazine in 2010 and became a publicly held business the following year
However, as , its losses widened, Crumbs began closing stores, shrinking from 65 locations earlier this year to the final 48.
Even a croissant-doughnut hybrid called a crumbnut failed to stop the rot .
James Angwin, a 43-year-old former Crumbs customer, said he was surprised to see the chain shut down .
“My waistline is not too disappointed about it,” he said.
Content created with:
Crumbs
Find out more