The Crumbs cupcake empire has been iced, but the cupcake rolls on

Sarah Kaplan (c) 2014, The Washington Post.

WASHINGTON — The lights are off at Crumbs Bake Shop on 11th Street NW in Washington. Chairs are stacked on top of tables. The glass display case stands empty.

There will be no more cupcakes sold here, or at any other Crumbs location. The New York-based chain rocked the pastry world Monday with news that it was closing all 48 of its stores. America’s largest cupcake chain is now a thing of the past.

But the cupcake trend, it seems, is not.

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Across town from the shuttered Crumbs location, local cupcake shops Georgetown Cupcake and Baked and Wired are doing brisk business.

“Considering the lines we have pretty regularly, it’s definitely not dead yet,” says Jamie Rosen, manager at Baked and Wired. “Not even a little bit.”

Ian and Debra Mishalove, standing outside with a cupcake each, will happily back Rosen up. The District of Columbia residents believe that cupcakes, in all their miniature, frosted glory, remain the ultimate dessert choice.

“They’re the perfect little package,” Ian says.

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The Mishaloves are, admittedly, a bit biased. The self-described cupcake enthusiasts ate the desserts on their first date and served them at their wedding instead of a traditional cake.

Even skeptics don’t think the pastry is going anywhere soon. Reeves Hankins, also enjoying a midday Baked and Wired break, calls the entire dessert industry “overhyped.” But he acknowledges that cupcakes have an undeniable appeal: they’re small, come in single servings, and have a particularly Instagrammable aesthetic.

It makes Hankins roll his eyes, but the empty wrapper beside him indicates he isn’t immune to a cupcake’s charms. He fell for the vegan chocolate option.

A few blocks away on M Street, the cashiers at Georgetown Cupcake are similarly busy. Just after noon on Tuesday, the line is modest compared with the block-long wait on most weekends. But the store’s tables are packed, and customers spill out onto the sidewalk, newly purchased cupcakes in hand.

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“I feel like the majority of people would rather have a cupcake than anything else,” says Simone Williams, a 15-year-old visitor from California, as she licks the rapidly melting frosting from her red velvet cupcake. She has wanted to visit Georgetown Cupcake since she began watching the TLC series about the store — one bite into her cupcake, she declares it worth the trip.

Thanks to its near-celebrity status — and visitors like Williams who are drawn to it — Georgetown Cupcake is somewhat insulated from the vagaries of America’s dessert cravings. The shop is at the center of a mini-empire, complete with cookbooks and five locations in multiple U.S. cities, and though she declined to share specific financial information, co-founder Sophie Kallinis LaMontagne says that sales are growing.

Beyond all that, LaMontagne just doesn’t buy the idea that enthusiasm for cupcakes has passed.

“I don’t necessarily think the performance of one particular company is indicative of the state of an entire industry,” she wrote in an email.

David Sax, author of “The Tastemakers” and an expert in food trends, has a similar take. He says that Crumbs’ demise was “a classic tale of overexpansion and borrowing too much money,” rather than an indicator that the cupcake trend has gone stale.

The chain, which began as a single store on Manhattan’s Upper West Side, was expanding just as demand for cupcakes was beginning to plateau — meaning that each new shop was making less and less money. In 2009, Crumbs raked in almost $1.2 million for each of its 25 shops. But last year, with 70 locations, the chain made just under $650,000 per store.

“They were relying on people lining up for cupcakes with the same attention they did in 2008 and 2010 . . . and no food trend can sustain that,” Sax says.

Even Wall Street wasn’t buying into the cupcake bubble. When the company went public in 2011, its stock opened at $16 a share — a number that had dropped to 15 cents right before the company announced it was closing. As of Tuesday afternoon, Crumbs stock was selling for a measly 4 cents. Crumbs had one location in Dallas, now closed. 

The height of the cupcake craze may be over, but Sax thinks that the trend has “matured.” Bakeries can’t depend on cupcakes’ cachet the way they once did, but the pastry is now an established part of America’s dessert landscape.

For bakers in the District of Columbia, Sax’s analysis rings true. Tessa Velazquez, director of operations at Baked and Wired, says that the shop’s array of offerings beyond cupcakes acts as a “buffer” against potential fluctuations in the cupcake market.

Hello Cupcake in Washington’s Dupont Circle neighborhood has also adopted this strategy — just last week, the store began opening earlier and serving breakfast pastries in order to attract customers looking for something beyond sweets.

“There is a finite market for people’s treat calories,” says owner Penny Karas. In a city saturated with dessert offerings, shops must diversify or end up like Crumbs.

There is, however, still the rare corner of the planet where cupcakes are an entirely new phenomenon. Brunella Carlomagno had never tasted a cupcake in her home town of Matera, Italy. Tuesday morning is the first time she has seen the pastries outside of the movies.

“It’s like a muffin with something on top, right?” she asks before taking a bite of a mocha cupcake.

She chews thoughtfully for a minute, then swallows.

“It’s very sweet,” she says, but she’s smiling.

The singular pleasure of a mocha cupcake — and the visitors who might clamor for one — keeps Hello Cupcake’s pastry chef, ShaDawn Ferguson, optimistic. As long as the cupcake business is bolstered by other baked goods, she thinks it will remain sustainable. After all, it’s hard to imagine a time when people won’t occasionally want to indulge in a cake-for-one.

Even so, Ferguson has her eye out for the next big thing: “It’s a battle between doughnuts and pie,” she says.

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Washington Post staff writer Tim Carman and Roberto A. Ferdman contributed to this report.