Crumbs in Ridgewood Photo by Lydia L
Forget Gold, the Gourmet-Cupcake Market Is Crashing
The icing is coming off America’s cupcake craze.
The dessert became a cultural and economic phenomenon over the last decade, with gourmet cupcake shops proliferating across the country, selling increasingly elaborate and expensive concoctions.
The craze hit a high mark in June 2011, when Crumbs Bake Shop Inc., CRMB -12.35% a New York-based chain, debuted on the Nasdaq Stock Market NDAQ -1.19% under the ticker symbol CRMB. Its creations—4″ tall, with fillings such as vanilla custard, caps of butter cream cheese, and decorative flourishes like a whole cookie—can cost $4.50 each.
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.
