Crumbs shows dangers of focusing on single product

  • Article by: CANDICE CHOI , Associated Press
  • Updated: July 8, 2014 - 7:38 PM

Successful chains diversify beyond the original fad that made them trendy.

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Harley Bauer carried of tray of cupcakes during Crumbs Bake Shop’s opening in Beverly Hills, Calif., in 2007.

Photo: MATT SAYLES • Associated Press file,

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– Turns out, being a one-hit wonder is risky.

When Crumbs, the New York City-based chain that built its business around cupcakes, shuttered several dozen of its remaining locations on Monday, it seemed like an abrupt ending for a company that opened a decade ago to ride the wave of popularity of the sugary treat sparked by the TV series “Sex and the City.”

But Crumbs’ rise and fall isn’t surprising when considering the company’s dependence on a fad. In fact, it’s the latest cautionary tale for businesses that devote their entire menus to a single product.

• Krispy Kreme, for instance, expanded rapidly in large part on the cultlike following of its doughnuts. But sales started declining and the company ended up closing some locations. Last year, restaurant industry researcher Technomic said Krispy Kreme had 249 locations, down from 338 a decade ago. The chain has broadened its menu more recently.

• A similar fate befell Mrs. Fields, which is known for its cookies. The chain has suffered in part because of the ubiquity of places that sell cookies, and it was down to 230 stores last year, from 438 a decade ago.

• TCBY had 355 stores last year, down from 1,413 a decade ago. Part of the chain’s problem is the competition, given the proliferation of frozen yogurt places.

Companies that only offer one item can fall victim to a number of risks. For one, trendy products tend to attract competition from big and small players that want to jump on the bandwagon. For instance, Starbucks and Cold Stone Creamery have been trying to capitalize on the cupcake trend with cake pops and ice cream cupcakes.

To combat the risks, many chains diversify their menus. And several have prospered by moving beyond their flagship products.

Dunkin’ Donuts has been pushing aggressively into specialty drinks and sandwiches, with a focus on boosting sales after its morning rush. And Starbucks has introduced a range of new foods and drinks in its cafes, including premium bottled juices and salad boxes. The coffee chain even plans to expand wine and beer offering in evenings to as many as 1,000 locations in coming years.

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