Crumbs Bake Shops Close, Company Could Seek Bankruptcy
CHICAGO (CBS) -- Gourmet cupcake shop Crumbs Bake Shop has shut down all its stores, including two in Chicago, in the wake of multimillion dollar losses.
The chain abruptly closed dozens of stores in at least 10 states and Washington, D.C., Monday night. The Crumbs website described the closings as "temporary," but a statement from the company suggests they will be permanent, as the company is moving forward with Chapter 7 bankruptcy liquidation.
"Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its employees while it evaluates its limited remaining options," the company said in an emailed statement.
Crumbs had two stores in Chicago, one at 303 W. Madison St., and another at Water Tower Place.
Based in New York City, Crumbs was founded in 2003 and went public in 2011, selling giant cupcakes in flavors including Cookie Dough and Girl Scouts Thin Mints.
More recently, however, it had been suffering from a steep decline in sales. For the three months ending March 31, Crumbs Bake Shop Inc. reported a loss of $3.8 million, steeper than the loss of $2 million from the same period a year ago.
The company had warned in a filing with the Securities and Exchange Commission this past May that it "may be forced to curtail or cease its activities" if its operations didn't generate enough cash flow.
As of the end of last year, Crumbs listed about 165 full-time employees and about 655 part-time hourly employees working in its stores.
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