Wikimedia Creative Commons


Crumbs’ Sweet Tale Of Second Chances

Crumbs Bake Shop was on the brink of extinction this summer, but an investor buyout and diversification strategy may spell sweet success.

When we last checked in on mid-size Crumbs Bake Shop Inc. just three months ago, the cupcake chain was shuttering its 48 stores and was in the process of evaluating such options as filing for bankruptcy after it delisted from the Nasdaq.

Fortunately for the business and its devoted followers across 10 states and the District of Columbia, the Crumbs story is about to get sweeter. The company was purchased in August by Lemonis Fischer Acquisition Company, LLC, for $6.5 million.

The company’s new owners are Marcus Lemonis, entrepreneur, investor, and the host of CNBC’s show The Profit in partnership with Fischer Enterprises, a privately held investment company based in Oklahoma City, Oklahoma, and is the owner of frozen treat maker Dippin’ Dots  and kettle-cooked popcorn maker Doc Popcorn, both of which serve national and international markets.

Lemonis is taking the opportunity to have Crumbs grand reopening in Manhattan and relaunch of e-commerce site to coincide with his reality show’s premiere on Tuesday, October 14th. From there the plan is to open 25 locations in the next month  in Boston, Chicago, Los Angeles, Newark, and Washington, DC. Lemonis said in a statement, “We’ll be leveraging collaborations between Crumbs and other companies in my portfolio in the coming months to introduce a wide variety of treats that consumers across the country will have access to.”

Though fans can expect to find their favorites including Carrot Cake and Cookies & Cream cupcakes and popular hybrids such as the Crumbnut (doughnut + croissant) as well as new offerings such as the Baissant (bagel + croissant) as well as a host of new flavors and gluten-free varieties.

The diversification strategy is going to be key as Crumbs attempts to push back into a crowded market against everything from Magnolia Bakery (it’s first rival that gained fame on HBO’s “Sex and the City”) to the myriad independent cupcakeries that popped up on Main Streets all over the U.S., to Dominique Ansel’s Cronut, the recipe of which isn’t under wraps any longer thanks to Ansel’s recent appearance on Good Morning America.

With all the competition, Crumbs might want to take a page from Cinnabon. That company recently pushed into products far beyond the mammoth roll slathered in sugar to air fresheners, vodka, and coffee –all featuring the signature infusion of cinnamon. In this way, Cinnabon expanded to 50,000 global points of distribution that accounted for $1 billion in retail sales last year.

With plans for a new cookie line, ice cream products, and a chocolate bar among other confectionary items, Crumbs strategy runs counter to the latest trend in M&As that has companies shopping for healthier food brands. Will customers clamor for a new outlet that satisfies their sweet tooth? Stay tuned.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>