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RIP Crumbs: Cupcake Chain's Closure Is Warning Shot For 'One-Item Wonders'

This article is more than 9 years old.

I love hate to say I told you so, but we at Forbes.com predicted the demise of Crumbs Bake Shop , the cupcake chain that abruptly closed all its 50 stores on Monday, back in April 2013.

"If Carrie Bradshaw were still tottering around New York," we asked, "where would the Sex And The City protagonist meet her girlfriends for a nosh and some gossip?"

Perhaps a modish food truck for mini gourmet tacos, our experts suggested. Or at socially-responsible Chipotle for a salad bowl. The ladies might even be on a BluePrint juice cleanse. But they wouldn't be eating cupcakes.

It was Sarah Jessica Parker's Bradshaw and her Manolo-clad gal pals who turned the 500-calorie-plus treats into an aspirational noughties-era craze after the gang first stopped by downtown Manhattan's Magnolia Bakery in 2000.

In the 14 years since, countless cupcake stores cropped up to fuel the trend, from home-baked mom and pop outfits to public companies like Crumbs.

The 11-year-old firm traded on NASDAQ until late last month, when it was forced to delist due to insufficient profits among other problems.

On Monday, Crumbs notified its employees that all its stores across 12 states would close immediately. (The company didn't immediately respond to a request for further information, including job losses; this post will be updated if they do.)

In 2013, when we wrote of the cupcake's imminent death, Crumbs' stock had sunk to $1.27 from a 2011 peak of $13. The day the company gave notice of its delisting, shares closed at 23 cents.

At the time, Wedbush Securities restaurant analyst Nick Setyan noted that that Crumbs' $3.50-plus-per-cupcake price tag made it an unappetizing prospect versus some of its cheaper regional counterparts -- not to mention Krispy Kreme and Dunkin Donuts.

At the latter, prices start at 25 cents for a 'munchkin', a 70-calorie doughnut hole that satisfies a sugar craving without representing such a huge chunk of one's recommended daily nutritional intake.

On Tuesday, Setyan said he wasn't surprised to see Crumbs close up shop. "They expanded too quickly with a product that simply was not differentiated or compelling enough," he said. "When the returns are not there, it's impossible to continue to operate."

Brian Sozzi, CEO of Belus Capital Advisors, understands the speedy proliferation of Crumbs and its mom-and-pop counterparts over the last decade. There's a low barrier of entry to market and a promise of high profit margins if run properly.

Today, he sees the end of the line for Crumbs as a warning for other one-item wonders: store chains trading off the popularity of one particular food or drink trend.

"The demise of Crumbs will go down as why one needs to appreciate the worldly success of Starbucks , and brilliance of Howard Schultz," said Sozzi, a retail and consumer expert, on Tuesday. "Unlike Crumbs and countless other niche restaurants and eateries, Starbucks has found a way to take the obsession with its core product and expand it into all sorts of fun eating and drinking experiences."

He added: "If you can't get beyond the one item that made you a star in the restaurant business, in the case of Crumbs its ginormous caloric bomb cupcakes, chances are you will die an ugly death."