Would YOU invest in cupcakes? That is a question a lot of investors are asking now that the Crumbs chain is trading on the Nasdaq.
The 35-store chain, with locations mainly on the coasts, is trading between its initial listing of $13 and $13.50 since its debut Thursday. The firm has plans to expand to about 200 locations by the end of 2014, and the founder sees a future with about 600 total units.
The good news is that another retailer wants to expand when landlords are still dealing with vancancies. Hello, empty Blockbusters!
Are consumers on a national scale ready to fork over $3.50 over for a cupcake on a regular basis, though. If Crumbs wants to be the dessert version of Chipotle, that might be OK, but people aren't going to go back for sweets as often as burritos, this article points out.
Plus, mass expansion by some sweet concepts haven't gone so well in the recent past. Cold Stone Creamery has shut its fair share of stores. And Krispy Kreme has had its serious problems.
Does a cupcake chain have a better shot, or is spending bigger bucks on these products a fad that will disappear?
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