Everyone Panic: The Cupcake Market is Crashing

Just like the 2008 financial collapse, the cupcake crash was bound to happen and we should all have seen it coming. Today the Wall Street Journal reports that Crumbs, the emperor of cupcake shops has projected its 2013 sales to drop to $57 million which is a far cry from its its initial projections of $73 million.

Because the franchise has a total 67 locations across the United States, it has kind of become the Dow Jones of the cupcake economy. If we use Crumbs as the official barometer of the cupcake economy, it looks like we are headed for a crash.

For those of you who aren't really familiar with cupcake history (which I believe is now part of every Women's Studies 101 class curriculum now), let me catch you up.

The demand for cupcakes started sky-rocketing around 2000 after Magnolia's, a signature cupcake shop was featured on HBO's Sex In The City. Just like the Brazilian bikini wax, after Carrie Bradshaw did it, everyone had to do it too (couldn't she just stick to yummy trends and stay away from the excruciatingly painful ones?).  Magnolia's grew into a huge chain with seven stores across North America and four overseas. Crumbs followed suit in 2003 with a new store featuring similarly amazing cupcakes such as Chocolate Pecan Pie or Red Velvet and has been growing as fast as my appetite right now (not everyone has what it takes to become a cupcake reporter). Check out the graph below to see just how fast the cupcake economy has been growing.

Source: The Wall Street Journal

"The craze hit a high mark in June 2011, when Crumbs Bake Shop Inc., CRMB -15.34% a New York-based chain, debuted on the Nasdaq Stock MarketNDAQ -0.91% under the ticker symbol CRMB. Its creations — 4" tall, with fillings such as vanilla custard, caps of butter cream cheese, and decorative flourishes like a whole cookie — can cost $4.50 each," according to the Wall Street Journal.

Although the demand has soared over the last decade, it now seems to have dramatically stagnated. 

"After trading at more than $13 a share in mid-2011, Crumbs has sunk to $1.70. It dropped 34% last Friday, in the wake of Crumbs saying that sales for the full year would be down by 22% from earlier projections, and the stock slipped further this week," continues the Wall Street Journal.

Translation: Start storing your cupcakes under your mattress (if you haven't already done so).

Who's to blame for this unforeseen cupcake collapse? I know that Crumbs' new peanut butter and jelly cupcake was kind of low on the amazing spectrum, but this is no reason to stop supporting the cupcake economy ladies! 

I personally blame the bankers. On second thought, I blame the government. Obama should have seen this coming. Did he really think cupcakes we're too big to fail? Where is the government bailout when you need it? THINK ABOUT THE CUPCAKES.

Maybe we can start an Occupy Cupcake movement and all head down to Zuccotti park? I know a LOT of women who are willing to stand outside for cupcakes for a really long time. I saw it every Friday in the line-up at Georgetown Cupcake.

 

If we all join our sticky hands together, I know we can make a difference and prevent this imminent cupcake collapse. 

How will you be preparing for this cupcake economy crash? Let me know on Twitter: @feministabulous