Cupcake Bakery Crumbs to Go Public
Sweet news for Crumbs: the country's largest cupcake chain (and No. 422 on the 2010 Inc. 500 list) is going public.
The company—started by Jason Bauer and his wife Mia in New York in 2003—will be acquired by the 57th Street General Acquisition Corp in a $66 million merger. The company will then change its name to Crumbs Bake Shop and seek a listing on the Nasdaq.
Crumbs—which was No. 1,553 on the Inc. 5000 in 2008 and 1,167 in 2009—operates 34 stores in six states. Jason Bauer told the New York Times the company planned to expand to 200 locations by 2014. (That voracious appetite for expansion earned Crumbs a spot in Inc.com's "Breakout Companies of 2010" list.)
In 2010, the company sold some 13 million of its cupcakes (price for a generously sized signature cupcake: $3.75) for an estimated $31 million in revenue. The investment company will pay Crumbs $27 million in cash and $39 million in stock. The Bauers—who sold half the company to Edwin Lewis, former CEO of Tommy Hilfiger and Mossimo, for $10 million in 2008—could receive another $44 million in stock depending on the company's future performance. They'll continue to run the business. Lewis will stay on the company's board.
The company didn't originally set out to take the cupcake. When the couple opened their first bakery on Manhattan's Upper West Side, it included 150 items—but just a few cupcakes. (One of them: Mia Bauer's coconut cupcake, which she first made in second grade—and which inspired the Bauers to start the bakery in the first place.) No matter what else the bakery sold, it was the cupcakes that would sell out. "A few months into the operation we decided to convert the bakery case into all cupcakes," Jason Bauer told BNet. "Mia went on a rampage and we started to be known as the cupcake place."
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.