A holding company called 57th Street General Acquisition Corp. Crumbs had 35 locations at the time. Crumbs' troubles began in mid, when it was orchestrating a massive expansion, according to former Crumbs president and CEO Julian Geiger. Same-stores sales started declining as the cupcake market was rapidly growing more crowded, and analysts began warning of a possible cupcake bubble.
Crumbs was also plagued by high real estate costs, according to Darren Tristano, executive vice president at the food industry research firm Technomic.
The company's shops averaged about 1, square feet, with one outlet near Chicago measuring 3, square feet, Tristano told Crain's New York Business reporter Aaron Elstein. The Wall Street Journal would later conclude that Crumbs' downfall was the result of mass "gourmet-cupcake burnout. Despite falling same-store sales, t he company kept opening new locations for several years, climbing to 70 locations in , up from 35 in mid It had planned to continue closing underperforming stores this year.
Recently, the company tried to offset its declines by licensing its treats, with coffee and bake mixes to be sold in grocery stores. Crumbs began selling the Crumbnut — which is a twist on the much-hyped cronut — as well as assorted cupcakes and ice cream cakes at BJ's Wholesale Club in April.
Slezak said in a March release. We believe these actions will put our business on a trajectory toward increased growth and vitality in the future. Crumbs auditors recently expressed "substantial doubt" over whether the company could stay in business.
The company also saw some obstacles to continuing operations, according to its most recent SEC filing. In its Q, the company wrote:. Raising additional funds by issuing securities or through lending or licensing arrangements may cause dilution to [Crumbs'] existing security holders, restrict our operations or require us to relinquish proprietary rights. Management believes that our cash flow requirements will likely consume our existing capital resources and cash from anticipated sales unless we are able to raise additional funds prior to June 30, On Monday, a Crumbs spokeswoman told the Wall Street Journal that it had been forced to stop operating while it considered its "limited remaining options.
For you. World globe An icon of the world globe, indicating different international options. Please bring confirmation of your order when collecting. Can I collect a day in advance? Collecting your cakes the day before you need them is fine. Please ensure you store and transport them safely as we cannot accept responsibility for cakes once they have been collected. How far ahead should I order? This is especially true for very large orders and orders involving lots of bespoke decoration.
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