It's a bad day for Crumbs Bake Shop and the gourmet cupcake industry.
The Nasdaq has suspended Crumbs Bake Shop's shares as of July 1, citing the company's failure to meet a requirement of having either at least $2.5 million in shareholder equity or meeting annual net profit or market cap benchmarks.
After Nasdaq submits another piece of paperwork, Crumbs will officially be delisted after 10 days, as per a filing on July 3.
The suspension has also led to a default on debt at the company: $9.3 million in the form of tranche notes and $5.1 million on the unsecured debt.
So the company, which went public three years ago, is closing all of its stores, the Wall Street Journal reported. It now has 58 stores.
Crumbs, which traces its roots to an Upper West Side shop in 2003, went public in 2011. The chain sold other sweets, but almost 80% of its sales were cupcakes in each 2010, 2009, and 2008. It had 35 locations in June 2011. It dreamed of 200 by 2014's end.
Indeed, Crumbs has had a tough time maintaining its early days of popularity through its traditional shops. Recently, it began creating a knockoff of the Cronut sold at New York's Dominique Ansel Bakery, selling it as a Crumbnut to BJ's Wholesale Club, Businessweek reported.
Last year, the Wall Street Journal in an April article claimed the cupcake market was crashing. They say it peaked just as Crumbs went public in mid-2011.