Less than a week after abruptly shutting down its stores, Crumbs is being saved by an investor group led by the host of CNBC’s The Profit.
Marcus Lemonis and Dippin' Dots owner Fischer Enterprises announced Friday night a deal to acquire the cupcake chain. The group has provided pre-petition secured financing for Crumbs’ Chapter 11 bankruptcy petition, which the company filed earlier in the day, committed to provide debtor-in-possession financing, and has entered into an asset purchase agreement, allowing it to buy Crumbs, pending approval from the bankruptcy court.
The group is hoping to complete the sale process in roughly 60 days and is looking to reopen select Crumbs locations or open new locations in the future.
The cupcake chain abruptly announced it was closing all of its four dozen stores on Monday, less than a week after Nasdaq suspended trading of its shares. The company went public three years ago at the height of the cupcake boom, but its finances worsened after years of losses.
“I truly believe in the Crumbs brand and am excited to help the company enter into a new chapter in its history,” said Lemonis, who in addition to hosting CNBC's The Profit, which focuses on rescuing small businesses, serves as CEO of Camping World and Good Sam Enterprises. “I think there is tremendous opportunity to expand the Crumbs offering, build on the company’s growth strategy and to leverage the synergies between Crumbs and other companies in my and the Fischers’ portfolio...[including] a new exciting product from an episode of the upcoming fall season of CNBC’s The Profit.”
Lemonis' portfolio includes several dessert-focused companies. On The Profit, he invests his own money in struggling small businesses in an attempt to turn them around.
Fischer Enterprises COO Scott Fischer added, “We strongly feel that the team we’ve put together has the business experience and industry know-how to improve Crumbs' product mix, broaden its consumer appeal and make the company a profitable business concern going forward.”
Fischer Enterprises previously provided Crumbs with a $5 million senior secured credit facility.
Crumbs CEO Edward Slezak said of the deal, "The steps we are taking today will allow us to continue to execute our business strategy, expand our licensing business and position ourselves to move toward a franchise store model. We remain saddened that we were forced to cease operations before this agreement was reached, but we strongly believe that pursuing this sale through the chapter 11 process is ultimately in the best interest of the company and its stakeholders.”
Lemonis' discussions and possible investment with Crumbs were first reported on Thursday.