CNBC's 'The Profit' Host Trying to Save Crumbs
UPDATED: Marcus Lemonis is part of an investor group that's in discussions to rescue the cupcake chain while Magnolia Bakery's CEO says the "Sex and the City"-referenced chain is "a part of pop culture," adding, "we're here to stay."
Still mourning the sudden closure of Crumbs’ stores? Well the cupcake conglomerate may not be dead after all, despite shuttering all of its four dozen stores earlier this week.
An investor group that includes CNBC The Profit star Marcus Lemonis, chairman and chief executive of Camping World and Good Sam Enterprises, and Fischer Enterprises, the Oklahoma energy family-based firm that bought Dippin’ Dots out of bankruptcy in 2012, is in talks to rescue Crumbs, Lemonis' rep confirms to The Hollywood Reporter.
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Lemonis plans to incorporate other holdings, including Sweet Pete’s Candy, into a new entity, CNBC reported.
The executive also confirmed to The Journal that he lent the cupcake chain a “not that substantial” amount of money Thursday with plans to further invest and reinvigorate the company.
But he indicated that future plans would involve more than just cupcakes.
"I like the brand, I like the concept, but in no universe in the long run does a…cupcake retailer make it," he told The Journal. "You have to add different lines of revenue."
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A spokesperson for Lemonis told The Times on Thursday that he “is discussing options with his partners.”
Meanwhile, Crumbs CEO Edward Slezak told The Times in a statement, “We know that everyone has an emotional connection to the Crumbs brand and its products and we’re pleased to be in talks with various interested parties that are allowing us to pursue all of our options for the business, which includes consideration of restructuring alternatives.”
Lemonis hinted on Twitter that he was working on saving Crumbs, posting tweets in response to articles about Crumbs closing reading, “stay tuned” and “not so fast.”
The Profit is centered around saving small businesses.
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Still, the fall of Crumbs may not mark the end of the cupcake craze.
The CEO of Magnolia Bakery, which is largely credited for boosting the popularity of the tiny cakes after its West Village location was featured in an episode of Sex and the City, tells The Journal in a separate story that cupcakes are here to stay and his business is doing just fine.
Magnolia has 14 locations worldwide, including 7 in the U.S., but CEO Steve Abrams said the business has no plans to takeover Crumbs, noting that the lack of on-site kitchens in the now shuttered stores and employees who never actually baked the cupcakes leaves "very little pick up for me."
Unlike Magnolia, which Abrams says bakes everything on the premises, creating a sensory experience for customers, Crumbs wasn’t as authentic.
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“It wasn’t really a bakery, it was retail points of sale that sold baked goods," Abrams tells The Journal. “There was no experience to be had in the stores or product.”
Thanks to Magnolia’s commitment to on-site baking, the company expands at a slower rate, which Abrams says will also help it from crashing the way the fast-growing Crumbs did.
Still, Abrams notes that the cupcakes predates and will outlive its craze.
“Magnolia supposedly started the craze in 2001, but we didn’t invent the cupcake. The cronut is something someone invented,” he tells The Journal. “We were just capitalizing on something everyone in the U.S. has loved since they were a kid…This is not going to kill the cupcake.”
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Magnolia, Abrams insists is multidimensional, making and selling goods other than cupcakes.
“Cupcakes have been under 50% of sales since the day I took it over. We have banana pudding, which is 14% of our sales. Overseas we have a savory menu,” he says.
But, Abrams does think Magnolia’s pop culture references, including in Sex and the City and The Devil Wears Prada help with sustaining its brand.
“I think at this point, we are part of pop culture. We can be referenced in one name, like Madonna, and people know. We’ve been spoofed on The Simpsons, on Family Guy. We’re very happy to take it. It shows we’re here to stay,” he says.