Crumbs Bakery Stock Crumbles as Fad Fades

By ABC News

Apr 22, 2013 11:03am

Designer cupcake shops, led by the Crumbs chain, drew lines around the block a few years back and expanded their locations rapidly. But the sugar high might be over.

“It really just doesn’t have the luxurious feel that it once had,” said Sierra Tishgart, an assistant editor at food and restaurant blog Grubstreet.

abc cupcakes nt 130421 wblog Crumbs Bakery Stock Crumbles as Fad Fades

                                                                                                            (Image Credit: ABC News)

Crumbs Bake Shop stock that went for more than $13 two years ago is now trading around $1.30, meaning one of its cupcakes sells for about the value of four shares of stock.

“They’re everywhere. Crumbs is all over the city, Magnolia is now abroad. They’re in Dubai,” Tishgart said of a competing bakery.

Last week, Crumbs sank more than a third after it announced sales were down 22 percent amid lack of demand for their ultra cupcakes and a host of competitors who have moved into the market.

“These are singularly focused concepts,” Darren Tristano, executive vice president at Technomic Inc., a Chicago research and consulting firm that specializes in the food industry, told the Wall Street Journal. “You’re not going to Crumbs every day.  It’s a short-term trend and we’re starting to see a real saturation. Demand is flat. And quite frankly, people can bake cupcakes.”


You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus