After more than 10 years at the forefront of the cupcake craze, Crumbs Bake Shop Inc. shuttered its high-end bakeries a week after it lost its stock listing on Nasdaq and defaulted on about $14.3 million in financing.
Employees at its remaining Los Angeles store and 57 other stores in 12 states and the District of Columbia, as of a May regulatory filing, were notified of the closures Monday, the last day of business. A spokeswoman for the New York bakery did not say how many workers lost their jobs.
“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,” including a Bankruptcy Court petition to liquidate its assets, the company said.
Crumbs opened in 2003 on the cusp of the cupcake craze and sold giant, specialty cupcakes in a variety of flavors such as red velvet, fluffernutter and smores.
The chain went public in 2011 at the peak of the trend, but more recently suffered from a steep slump in sales. For the first quarter this year, Crumbs reported a loss of $3.8 million, steeper than the $2-million loss in last year's first three months.
The company started closing its more unprofitable stores last year, including bakeries in Malibu, Glendale, Hollywood and Beverly Hills. The one remaining California location, a small, corner store on Larchmont Boulevard in Los Angeles, closed its doors Monday night.
On July 1 the Nasdaq stock market suspended trading because the company did not have the mandatory shareholder equity or did not meet required benchmarks for market capitalization and net annual profit.
The company had warned in a May filing with the Securities and Exchange Commission that it “may be forced to curtail or cease its activities” if its operations didn't generate enough cash flow.
Crumbs' shares peaked at $3.49 early last year. They hit 11 cents on June 30, its final day of trading.
As of the end of last year, Crumbs listed about 165 full-time and about 655 part-time employees at its stores.
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