The nation's cupcake craze could be crumbling given Monday's abrupt shutdown of the nation's largest specialty chain dispensing the baked goodies.
New York's Crumbs Bake Shop closed its 48 stores a week after disclosing Nasdaq was delisting its stock — a move that would trigger defaults on nearly $14.5 million in loans.
The 11-year-old company, which lost $23 million in the past two fiscal years, tried to boost sales in April by selling its cupcakes and other treats at Westboro-based BJ's Wholesale Club's stores.
While being publicly traded likely pressured Crumbs to grow quickly, multiple factors are working against cupcake bakeries, including market saturation, the economy and a fad that's "fading out," said Bonnie Riggs, restaurant industry analyst at market research firm NPD Group. "(The cupcakes) are very pricey. It's a highly discretionary purchase, and it's also something that you don't buy on a regular basis. The market is just not big enough to sustain a number of these concepts."
With four shops in Boston, Burlington and Natick, Crumbs competed locally with Hub-based Sweet Cupcakes, Somerville's Kickass Cupcakes, Needham-based Treat Cupcake Bar and Washington, D.C.-based Georgetown Cupcake.
But for Sweet — Boston's first dedicated cupcake chain in 2008, now with six locations — sales still are going strong, said owner Courtney Forrester: "I don't think of fresh baked desserts as being a fad. We are fortunate to be enjoying success ... and just continue to focus on really good, fresh baked products, the best services and really nice store environments."
Sweet opened in Newton in May. "We had been getting a lot of delivery requests out in the western suburbs, which in the past has been a good, solid gauge for us of customer demands," she said.
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