Sad news for the cupcake industry: Crumbs is closing up shop. The company was recently removed from the Nasdaq list and it was quick to shut down all the other branches after week. It failed to meet the $2.5 million minimum requirement of the Nasdaq Stock Market for the first time on July 1.
The cupcake shop already notified all employees of the bad news. No information has been given how many employees will lose their jobs but it has listed 65 locations across 12 states in the United States.
"Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its employees while it evaluates its limited remaining options," Crumbs said in an email.
The company will soon file for Chapter 7 bankruptcy liquidation. It went public only in 2011 after being in the business since 2003. Crumbs was founded in Manhattan by husband and wife Jason and Mia Bauer. It became popular for the cupcakes sold in different flavors like Girl Scouts Thin Mints and Cookie Dough.
It was all-good for many years but sales recently went down. During the first quarter of this year, the company lost $3.8 million. Last year, same period, Crumbs lost $2 million. During the 4th quarter of 2013, nine shops were closed and another six during the start of 2014.
Cash flow wasn't enough so it filed a warning with Securities and Exchange Commission last May. Sales only continued to decline so it was quick to "cease its activities" and now it's shutting down officially.
The New York cupcake chain Crumbs has not officially announced the closure but the news is all over the media. The company was even trending on Twitter last Monday night.
Crumbs is a cupcake empire. Its closing down could mean the end for other cupcake businesses as well.
Employees were clueless about the closure. In an interview by Daily News, a Crumbs employee said, "Just today we found out something was going on because a manager called to say we were closed Tuesday -- but they made it sound like it was just for one day."
"Nobody knows anything or what to do, the employees are finding things out online or from customers coming in and asking us stuff," another employee remarked.
Looks like the employees really had no clue with what was happening and they had to find out from customers or online.
