Crumbs Closes All Its Stores as Crumbnuts Fail to Revive Chain

Bloomberg News

, the New York-based cupcake chain, closed all of its stores yesterday following years of struggling to make money in a crowded market for baked goods.

'Crumbs has been forced to cease operations and is immediately attending to the dislocation of its devoted employees while it evaluates its limited remaining options,' the company said today in an e-mailed statement.

The move follows an attempt to reinvigorate the company under Chief Executive Officer Edward Slezak, a former executive who took the reins at Crumbs in January. After losses of about $23 million the past two fiscal years, Crumbs tried to bolster sales in April by forging ties with BJ's Wholesale Club. That included selling a croissant-doughnut hybrid called a crumbnut at the warehouse chain.

As of April, Crumbs had about 65 locations in 12 states and the District of Columbia. The stores were all closed by yesterday evening.

The company, which was started in 2003, said in a filing last week that the Nasdaq Capital Market was delisting the stock. The move is expected to trigger a default on more than $14 million in loans, Crumbs said.

To contact the reporter on this story: Selina Wang in New York at swang533@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net John Lear