My sweet tooth must have been on the fritz. That’s the only way I can explain how I missed the news that a gourmet cupcake company went public with an offering of stock.
It occurred three years ago as Crumbs Bake Shop was acquired for $66 million from its Manhattan founders and taken public as CRMB on the Nasdaq market with big plans for expansion.
Crumbs was in the news again last week, when it abruptly closed four dozen stores after running out of money. Eulogies for the cupcake craze followed immediately.
The website Business Insider traced the arc of the craze to 2000 and a scene in HBO’s “Sex and the City” in which characters Carrie and Miranda enjoy gourmet cupcakes outside a New York City bake shop. Crumbs opened its first shop three years later; others did likewise in communities across the country.
Soon, the ever-more-elaborate — and pricey — confections were everywhere. Georgetown Cupcake, born outside Washington, D.C., got its own reality TV show; the Food Network premiered “Cupcake Wars.” Pundits perceived a bubble and predicted it would pop. Last year, as Crumbs’ financial struggles became apparent, stock and food analysts told the Wall Street Journal that the novelty was over.
We saw the craze here, too: Bettie’s Cakes of Saratoga Springs, a retro-themed shop that also sells out of a double-decker cupcake bus; Coccadotts of Colonie, known for winning an episode of “Cupcake Wars,” expanded to three local shops and one in South Carolina.
Collette DiCarlo, who started Truffles Cupcakes in Schenectady four years ago, is a relative newcomer to the field. The business was a way to transition from a stay-at-home mom to a still-available one who works a few days a week.
She sells her home-baked goods — cupcakes, brownies, crumb cakes and cookies — at farmers markets and the Niskayuna Co-op. She also posts a cupcake gallery online and fields inquiries there.
DiCarlo says she saw the cupcake craze firsthand — from “phenomenal” sales her first year to sales now that are still good but lower. She attributes her continuing success to keeping in mind “people like me” who might like to indulge in a gourmet cupcake but not go broke doing so.
DiCarlo sells a four-pack of cupcakes for $5; Crumbs charged close to $4 for one cupcake.
She has followed the Crumbs’ story with interest. “They got too big too quick,” DiCarlo says, citing the overhead of multiple stores and payrolls.
But there was good news this week for Crumbs. Even as the company filed for Chapter 11 bankruptcy protection, it did so with an agreement in hand from two experienced businessmen ready to step in with new financing to reopen the stores and reignite growth.