Crumbs Bake Shop Chain Closes All Its Stores

by San Antonio Attorney

Crumbs, which is famous for its extra-large specialty cupcakes, closed its almost 50 locations in 10 different states as well as in District of Columbia.

The bake shop went public in 2011. Its going out of business was announced less than two weeks after the NASDAQ revealed it would discontinue trading Crumbs. The famous cupcake shop which owed its fame to “Sex and the City” and Magnolia Bakery, hoped that it could sustain growth by putting up stores nationwide.

Crumbs saw a substantial loss of profits since its introduction on the market. Last March, the company stated a total deficit of $28.8 million in its quarterly report.

The cupcake maker’s bankruptcy was a surprising setback for the company which has experienced some growth during the last decade. Nevertheless, David Sax, a writer specializing in business and food, was adamant that cupcake bakeshops have a positive future.

According to Sax, the company’s failure was due to mismanagement of its products. The closure of Crumbs does not imply that every other cupcake bakery will also be unsuccessful.

The disappointment of customers over the sudden closure of Crumbs Bake Shops was palpable. It even whipped social media users into a craze.

Crumbs has been forced to stop its operations and is currently attending to the dislocation of its workers while it considers its options, including filing for Chapter 7 bankruptcy liquidation.

By the end of 2013, Crumbs listed approximately 165 full-time and around 655 part-time workers at its stores.

After more than a decade at the forefront of the cupcake frenzy, Crumbs began closing its least profitable shops last year, which includes bakeries in Beverly Hills, Hollywood, Malibu, and Glendale. On Monday, the last Crumbs shop located in Los Angeles California closed down.

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