Cupcake Chain Crumbs Delisted From Nasdaq
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Looks like Crumbs is past its sell-by date.
In a regulatory filing Thursday, the cupcake chain announced it will be delisted from the Nasdaq on July 1.
The exchange's decision was a result of Crumbs' failure to meet the minimum $2.5 million stockholders' equity requirement, according to the Securities and Exchange Commission filing.
While Crumbs can appeal the Nadsaq's decision, with such a bleak outlook, the move seems unlikely. The largest cupcake shop in the U.S. has been struggling as the marketplace has become more crowded and as the cupcake fad has lost steam. In the first three months of this year, the company's net loss widened to $3.8 million from $2 million the same period a year ago. Sales were at $9.1 million, down 25 percent from a year ago.
At the time, Crumbs said it expected to record net losses in future periods. The company also stated that in the mere month and a half from the end of March to mid-May, seven underperforming stores closed.
Shares of Crumbs have plummeted in the three years since they debuted on the Nasdaq in June 2011 at $13.10. On Thursday, when the announcement was filed, shares were trading at 23 cents, and as of 1 p.m. ET on Friday, were down to 16 cents.
Crumbs, which has 65 locations nationwide, began as a single bakery in New York City in 2003 amid a veritable cupcake craze that spawned chains such as Sprinkles, Magnolia Bakery and Sweet Arleen's. Over a decade later, the future of sweet treats in America now seems to be set on finding the new trendy food, whether it be cinnamon rolls or ice cream sandwiches.