Crumbs loss tops $15 million in fiscal 2013
March, 20, 2014
by Eric Schroeder
NEW YORK — Crumbs Bake Shop, Inc. sustained a loss of $15,261,000 in the year ended Dec. 31, 2013, which compared with a loss of $7,695,000 in fiscal 2012. Net sales increased 10% to $47,203,000 from $43,029,000.
“We have known for quite some time now that we needed to evolve our business model,” said Edward M. Slezak, chief executive officer. “During the fourth quarter we took the necessary steps to put ourselves in position to do just that. Our focus for 2014 will be on executing our initiatives and strategies of licensing our brand for complimentary product categories, positioning ourselves to move toward a franchise store model, and continuing to close under-performing stores. We believe these actions will put our business on a trajectory toward increased growth and vitality in the future.”
During the fourth quarter, Crumbs narrowed its loss to $4,842,000 from $5,361,000 in the same period a year ago. Net sales increased 5% to $11,352,000 from $10,776,000. Same store sales were down 8.5%.
“We experienced significant drops in sales anytime there was inclement weather in a region we have stores,” Mr. Slezak said during a March 19 conference call. “The sales drops during weather events affected both our street level and mall-based stores, and not only caused us to miss sales due to reduced foot traffic, but as you can imagine significantly increased our cost of goods sold during that period.”
Crumbs opened one store in the fourth quarter and closed 9 underperforming stores. Already in fiscal 2014 the company said it has closed an additional 6 underperforming stores. The company has 65 locations in 12 states and the District of Columbia.