And so the great cupcake bubble of the 21st century has burst, taking with it the industry’s most prominent chain. New York-based Crumbs has closed all of its locations a week after NASDAQ suspended trading of the company’s stock.
Until yesterday, Crumbs had been operating around 50 stores in 10 states and Washington, D.C., but employees were notified on Monday that all stores would close permanently on Monday, reports the Wall Street Journal.
“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 company said in a statement to the Journal.
Riding a wave of big publicity and consumers’ desires to dive into mammoth cupcakes covered in cookies, candies, and syrups, Crumbs went public in 2011 with a share price of around $13. By the spring of 2013, confidence in the business had crashed, with Crumbs shares selling for less than $1.50.
The company tried to stay afloat by cutting 15 stores in the last year, but the stock price continued to tumble, sinking below $.30 per share. When Crumbs couldn’t meet NASDAQ requirements for having either at least $2.5 million in shareholder equity or meeting benchmarks for its market cap or annual net profit, the stock market suspended trading of the once-sweet stock on July 1.
Employees were told they would not be paid for any days past July 7. As of Tuesday morning, the Crumbs website is still up and appearing to take orders, though we’d obviously advise against trying it, because you might be in for a long wait.