Crumbs cupcakes chain may find savior in CNBC star Lemonis
Days after shuttering all its stores due to financial struggles, Crumbs Bake Shop Inc. could be making a comeback.
An investor group that includes the Fischer Family and Marcus Lemonis, who heads Camping World and Good Sam Enterprises and stars on CNBC’s “The Profit” TV series, already has funneled money into the cupcake chain to keep the company afloat and as a prelude to an acquisition, Lemonis told the Los Angeles Times on Thursday.
“The company has limited cash, and we are trying to come up with a situation that allows the company to remain viable,” he said. “We are in the final stages of working on a plan to get the stores reopened and people rehired.”
On Monday, the high-end specialty cupcake chain closed 48 stores in 10 states, including one in Los Angeles, after it lost its stock listing on Nasdaq and defaulted on about $14.3 million in financing.
“We know that everyone has an emotional connection to the Crumbs brand and its products, and we’re pleased to be in talks with various interested parties that are allowing us to pursue all of our options for the business, which includes consideration of restructuring alternatives,” said Edward M. Slezak, the New York company’s chief executive.
Lemonis said Crumbs’ major downfall was selling only one dessert -- gigantic, expensive cupcakes. He plans to infuse other sweets and amp up its coffee offerings to make it more of a “sweets and snack shop.”
Lemonis owns Florida candy chain Sweet Pete’s Candy and wants to incorporate that, along with other brands, into a new Crumbs entity. His interest in Crumbs was first disclosed by CNBC early Thursday.
“It’s called a bake shop, so we want to make that happen,” he said.
“I, along with the potential other suitor, have investments in other cupcake, candy and dessert chains. I want to put pies, cookies, candies, and make it a dessert destination.”
He did not give any details about the deal or a timeline as to when the Crumbs revival would take place. He said the whole thing is “up in the air.”
Lemonis said he plans to discuss with the company a plan to create an expanded chain but still retain the Crumbs brand.
“My main goal is to rescue the business,” he said. “I truly believe in the brand.”
Lemonis understands the chain’s dire situation and called the deal a “herculean effort.”
After news of the possible acquisition broke, Crumbs’ stock soared 990% from 3 cents to almost 35 cents as of mid-morning trading.
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