Gourmet cupcakes are crashing

It’s about time, and it’s not just Bitcoin:

After trading at more than $13 a share in mid-2011, Crumbs has sunk to $1.70. It dropped 34% last Friday, in the wake of Crumbs saying that sales for the full year would be down by 22% from earlier projections, and the stock slipped further this week.

Crumbs in part blamed store closures from Hurricane Sandy, but others say the chain is suffering from a larger problem: gourmet-cupcake burnout.

“The novelty has worn off,” says Kevin Burke, managing partner of Trinity Capital LLC, a Los Angeles investment banking firm that often works in the restaurant industry.

The cupcake high water mark seems to have been June of 2011.  Here is more, and I thank several MR readers for the pointer.

Comments

Hm, it's actually spelled "Cynomomics" at the website. Let he who is without sin ....

Ha! Serves me bloody well right. Tries again: "it’s actually spelled “Cynicomomics” at the website. Let he who is without sin …." Yay, and motes and beams and stuff.

I read the article with interest, but it focuses almost entirely on Crumbs - sure, they're facing some challenges, but are they really the face of the gourmet cupcake craze? What about Magnolia Bakery, Georgetown Cupcake, or any of the other bakeries that have cropped up in the D.C. area? (My personal favorite was Red Velvet Cupcakery's location in the Reston Town Center, and they always seemed to be busy).

Those other shops may not have the Wall Street profile that Crumbs has, but that branding seems like a detriment, and not something that their customers like. Crumbs is a corporate brand, and their shops reflect that. Georgetown Cupcake is a tourist destination now, though it was a much more localized phenomenon just a few years ago. And the proliferation of bakeries and cupcakes in the area doesn't exactly signify a slowdown. Like them or not, I don't see how one (corporate) shop's troubles reflect a broader trend away from gourmet cupcakes.

It's the fundamentals: cupcakes just aren't that good. Except for Canadian ones, of course.

Well, in our trendy part of town, 2/3 of the cupcake stores are closed. Un the other hand, gourmet (but not absurdly expensive) hamburger joints are rising like weeds.

When College Station, TX has three gourmet cupcake shops, you know the trend has run its course.

Sometimes one wonders how these things can come and go an not even be noticed. Am I missing some deep cultural manifestation?

You just don't watch The Food Network, or The Cooking Channel, do you?

So what will be the next silly trend?

Glazed donuts.....oh, wait.

Froyo

brb, running out to file a trademark application for "YOLO Froyo"

Posted my comment below before I saw this one. I think we're at peak froyo right now.

A thick slice of gourmet, unpasteurized, small-production cheese melted between two slices of handmade artisanal bread grilled over a sustainably harvested, locally grown, American oak wood fire, washed down with zero-calorie sparkling spring water effervescent with carbon dioxide captured from clean natural gas combustion for electric power generation at a Google datacenter.

In any case, the demise of Crumbs is good news for PTA's around the country.

Last time I was there, the gourmet cupcake place in Georgetown had an hour long line to get in.

If I were going to guess which city's residents were lavishing funds on a dying industry, DC would be my first choice.

Crumbs and Georgetown Cupcake just do not match up with Sprinkles in quality. I can assure you that right now, there is a line outside of Sprinkles in Beverly Hills, and even after they close, there will be a line for the "Cupcake ATM".

Sprinkles recently opened a new location at The Grove:
http://www.neontommy.com/news/2012/11/sprinkles-cupcakes-opens-newest-location-grove

That is on top of: beverly hills | chicago | dallas | georgetown | the grove | houston | la jolla | los angeles | new york | newport beach | palo alto | scottsdale

On a somewhat ironic note, my wedding was June 5th, 2011, wherein we substituted a wedding cake for a display of gourmet cupcakes. I actually recommend this to anyone, as taste and aesthetics are roughly equal in my eyes but costs about one-fifth less.

Froyo is next. We're at peak froyo right now.

Comments for this post are closed