Cupcake Meltdown In NYC, Crumbs To Close All Locations

It had a good run, but a cupcake craze spanning across more than a decade in New York City (and later, elsewhere) may be coming to an abrupt end with the closure of all outlet of the Crumbs chain of “cupcakeries.”

Yesterday, it was reported that Crumbs — which operates in more than twelve states with dozens of locations — would be closing immediately. The news followed the delisting of Crumbs from the Nasdaq.

Crumbs was part of the city’s cupcake boom, one that ignited following the appearance of the then-tiny, retro downtown shop Magnolia Bakery on the HBO hit Sex And The City. Before the epic financial meltdown of the late ’00s, the cupcake market rallied — and in 2003, the chain entered the then burgeoning number of dedicated cupcake stores.

While often such a decline is incremental, the downfall of Crumbs resulted in an unpleasant surprise for many employees — who learned via a call yesterday that the chain would cease operations effective immediately at the end of the business day Monday.

As soon as news of Crumbs closure leaked, reporters reached out to workers in the New York City branches of the chain.

In Brooklyn Heights, one worker said:

“It’s a real curveball for us… Normally, you get two weeks’ notice when you’re closing down — you don’t get one-day notice.”

Another stunned Crumbs employee hinted that workers might not get paid, admitting that he might lose his apartment, and adding:

“I come into work today, I’m happy, I’m skipping to work, and suddenly I don’t have a job.”

In a statement to the Wall Street Journal, Crumbs executives confirmed the abrupt cessation of operations in all outlets, telling the paper:

“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 AP notes that while the closure of Crumbs appears to be sudden, a steep sales decline detailed in stock market filings evidences a longer wind-down:

“Crumbs was founded in 2003 and went public in 2011, selling giant cupcakes in flavors including Cookie Dough and Girl Scouts Thin Mints. More recently, however, it had been suffering from a steep decline in sales. For the three months ending March 31, Crumbs Bake Shop Inc. reported a loss of $3.8 million, steeper than the loss of $2 million from the same period a year ago… [Crumbs] 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.”

Prior to its closure, Crumbs shuttered several locations earlier this year.

[Image: Crumbs]