Crumbs: An Obituary

July 13, 2014 in Daily Bulletin

Crumbs, the chain of cupcake stores, has shut its doors. Lisa Wirthman took a look at where it all went wrong:

  • In an increasingly health conscious world selling cupcakes with 800 calories in them probably wasn’t a winning strategy.
  • It had too many stores. Manhattan alone had 20, and they all cannibalized each other’s sales.
  • The bakery made the fateful decision of expanding into suburban markets, but its business model really only works in busy cities.
  • Crumb stores were much bigger than they needed to be and this led to high rents and unused capacity.
  • In contrast Magnolia, another cupcake maker, has remained successful due to diversification of products, and fewer stores.

Read more about what Crumbs did wrong and what Magnolia did right over here.

Source: Mid Market Pulse