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Crumbs Bake Shop May Get a Lifeline From Investors

/ Source: CNBC.com

Why Crumbs crumbled

Jul.08.201401:38

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Hold onto your cupcakes, Crumbs may be saved. Just days after shuttering its stores, Crumbs Bake Shop is close to getting financing from a prominent investor group that includes the Fischer Family and Marcus Lemonis, Chairman and CEO of Camping World and Good Sam Enterprises and star of CNBC's "The Profit." The group confirmed Thursday that it plans to provide financing for the struggling cupcake chain as a prelude to an acquisition. Lemonis plans to incorporate other holdings, including Sweet Pete's Candy, into the new company that contains Crumbs. In a CNBC in-person interview in April, Crumbs CEO Ed Slezak placed part of the blame for the company's difficulty on its flagship product, saying the cupcake is "too narrow of an assortment" and "too tight a niche to attract a sufficient number of people" daily. Crumbs' rapid expansion coincided with a drop in cupcake demand. For the year ended in April, cupcake servings from retail shops fell 8 percent, according to market research firm The NPD Group.

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Why Crumbs crumbled

Jul.08.201401:38

IN-DEPTH

-- CNBC Staff Writer Katie Little

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