Crumbs Could Get Reprieve Thanks to Investor Group
Shortly after shuttering its stores, Crumbs Bake Shop is close to securing financing from a prominent investor group.
An investor group that includes the Fischer Family and Marcus Lemonis, Chairman and CEO of Camping World and Good Sam Enterprises and star of CNBC's "The Profit," confirmed it plans to provide financing for the struggling cupcake chain as a prelude to an acquisition.
Lemonis plans to incorporate other holdings, including Sweet Pete's Candy, into the new entity that contains Crumbs. Click here for the full Profit episode about Sweet Pete's.
On Monday, the gourmet bake shop closed all of its stores roughly one week after its shares were delisted from the Nasdaq stock exchange.
In a CNBC in-person interview in April, Crumbs CEO Ed Slezak placed part of the blame for the company's difficulty its flagship product, saying the cupcake is "too narrow of an assortment" and "too tight a niche to attract a sufficient number of people" daily.
Crumbs' rapid expansion coincided with a drop in cupcake demand. For the year ended in April, cupcake servings from retail shops fell 8 percent, according to market research firm The NPD Group.
After going public in 2011, Crumbs quickly expanded to 79 stores by early August with a sizable mall presence. Ahead of its delisting, the company had been aggressively closing underperforming stores and focusing on licensing efforts as it tried to turn around the business.
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