Crumbs Bake Shop, once valued at $66 million, bought back by founders for $300
Crumbs Bake Shop — a cupcake empire valued at $66 million when it went public more than a decade ago — was quietly bought back by its founders for $300, The Post has learned.
The Big Apple bakery — credited with igniting a cupcake craze in the early 2000s — had built a chain of 79 stores across eight states, only to be left for dead in a 2014 bankruptcy despite a major growth push by high-profile retail executives.
Last year, co-founders Jason and Mia Bauer, who started Crumbs in 2003 with a single shop on Manhattan’s Upper West Side at West 75th Street and Amsterdam Avenue, retook control for $300 — that is, the fee that’s required to purchase an abandoned brand from the US Patent and Trademark Office.
“The USPTO website said that Crumbs’ trademark was ‘dead, abandoned and unreviveable,'” Jason Bauer told The Post in an interview.
While the Bauers respectfully disagree, they’ve also elected to flip the business strategy — namely, by avoiding a pricey retail expansion. Instead, Crumbs cupcakes are now being sold on the web and distributed at supermarkets — some 400 ShopRites, Gristedes, Westside Markets and Fairways – and for about half the price.
It’s a different world from 2003, when the Bauers were looking to exploit what they saw as customer fatigue with big supermarkets offering tired, mediocre selections of baked goods.
“Neighborhood bakeries had disappeared at that time and we wanted to become that local destination again,” Jason said.
Suffice it to say the world changed. Crumbs, along with rival cupcake purveyors including Magnolia, Sprinkles, Cupcake Nouveau and Georgetown Cupcake grabbed outsize market share over the next two decades.
The Bauers sold half their Crumbs stake in 2008 for $10 million to an angel investor and kept growing the brand.
By 2011, there were 50 stores and the Bauers sold their remaining stake.
“We were selling one million cupcakes a month,” Mia said.
The company went public in 2011, briefly nabbing the $66 million market valuation, but the sugar high didn’t last long.
Aeropostale’s ex-CEO Julian Geiger goosed growth over the next two years, opening some 25 Crumbs shops in malls.
But the vast expansion only expedited Crumbs’ fall into bankruptcy.
The problem: mall shoppers spent less per transaction than the typical $20 to $25 purchase at the freestanding stores the Bauers ran, according to Jason Bauer.
“I have no desire to talk about Crumbs,” Geiger told The Post when reached by phone.
In 2014, Marcus Lemonis, star of the CNBC reality show “The Profit,” partnered with Fischer Enterprises to buy Crumbs out of bankruptcy for $6.5 million, but sold his stake in Crumbs at a “significant loss” a year later.
Lemonis could not immediately be reached for comment.
He has said previously that he was a minority investor and as such wasn’t able to “effect change.”
“We felt we left it in the hands of people who would grow it,” Jason said. “It was heartbreaking to us to see our baby close.”
Now, a package of a half-dozen Crumbs cupcakes at grocery stores costs $10 to $13, while the Crumbs website offers larger cupcakes for $45 for a six-pack.
“Fast forward to 2023, and we now have the ability to communicate with our consumers via social media without having to be in a physical store,” Jason said.
The Bauers plan to open a flagship store in the Big Apple in the next couple of years — and are in discussions with licensors for shops in the Middle East and Asia — but are steering clear of amassing a real estate portfolio, they said.
They’ve also slimmed down their offers from 60 varieties to about a dozen of the most popular flavors, including a chocolate blackout, red velvet, cookies and cream and cotton candy and added jars of cookies to the line-up.
