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Crumbs’ Downfall Shows Limits of American Cupcake Addiction

Is America’s decade-long cupcake craze ending?

The frenzy, which spawned treat-dispensing ATMs and a $42 “colossal” cupcake that serves eight people, ran into reality this week when Crumbs Bake Shop Inc. shut all 48 of its stores. After initially planning to open 200 locations nationwide, the chain struggled to expand beyond its home base in New York and a few other pockets of affluence. The company lost tens of millions of dollars and now faces default on more than $14 million in loans.