If they manage to take over the company, it won’t look exactly the same. The buyers do hope to re-open some current locations, but likely not all of them. They also want to open new locations as well. The company would still retain its focus of high quality specialty cupcakes, but they would also offer additional food compliments to make the new locations a “sweet and snack” destination. This would help the stores expand the customer base beyond only those who love cupcakes, and give the stores a better chance at profitability and success. The financing from the deal would also allow the company to pursue a franchising model for the future.
Marcus Lemonis is well known as the no-nonsense host of the CNBC television show The Profit where he invested his own money to help turn around struggling businesses. He owns a few other dessert-focused companies, as well as being the CEO of Camping World. Fischer Enterprises has investments in a variety of other food brands. The two groups have other snack holdings include Dippin’ Dots ice cream, Doc Popcorn, Wicked Good Cupcakes and Little Miss Muffin, which should create synergy with this investment, and provide a way for the new Crumbs to expand beyond gourmet cupcakes.
Crumbs began as a single store in the Upper West Side of Manhattan in 2003, but has struggled for a number of years. It started to close under-performing stores in 2013 as it accumulated large losses. It had posted a loss of $10.3 million in 2012, and then an additional $18.2 million loss last year. At the end of the first quarter this year, it had a total of 65 retail outlets in 12 different states.
(Photo courtesy of m01229)