Is America’s decade-long cupcake craze ending?
The frenzy, which spawned treat-dispensing ATMs and a $42 “colossal” cupcake that serves eight people, ran into reality this week when Crumbs Bake Shop Inc. (CRMBU) shut all 48 of its stores. After initially planning to open 200 locations nationwide, the chain struggled to expand beyond its home base in New York and a few other pockets of affluence. The company lost tens of millions of dollars and now faces default on more than $14 million in loans.
While Crumbs had unique challenges, including the demands of being a public company, the industry faces a painfully crowded market for baked goods and is seeking ways to enliven a fad that’s lost its novelty. Sprinkles Cupcakes Inc. has 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.
To read the rest of the story, please go to: Bloomberg
