The $66-million cupcake deal: By the numbers

Will our collective hunger for cupcakes ever end? Eleven years ago, Carrie Bradshaw bit into a buttercream-topped confection from New York's Magnolia Bakery on "Sex and the City," and a national obsession with the retro desserts began. Since then, cutesy cupcake shops with names like Sprinkles and Sugar Sweet Sunshine have become big business, and America's largest chain, Crumbs, recently announced a $66-million merger with plans to go public and expand to 200 locations over the next three years. Some analysts question whether cupcakes are a healthy investment. "I could be wrong, but it seems to me it has a faddish feel to it," says BGB Securities' Sam Yake. But YCMNET Advisors' Michael A. Yoshikami is more optimistic, noting that while "this is not Google," cupcakes are "a niche with legs." Here, a data snapshot of the cupcake sector:

$66 million

Price that the 57th Street General Acquisition Corporation, an investment company, is paying Crumbs in a merger deal, with $27 million in cash and $39 million in stock

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

1

Number of Crumbs bakeries in operation in 2003, when husband-and-wife team Jason and Mia Bauer opened the bakery in New York City

34

Number of Crumbs bakeries now open, across six states. After the merger, the Bauers will retain a sizable share in the company and continue to run it. "I've been in this business for eight years, and we've grown it every year," Jason tells The New York Times. "If I had a nickel for every time someone asked me if cupcakes were a fad, I wouldn't need to do this deal."

200

Number of Crumbs locations the company plans to have in operation by 2014

$31 million

Estimated revenue Crumbs generated in 2010

$2.5 million

Estimated earnings before taxes, interest, depreciation, and amortization that Crumbs generated in 2010

13 million

Approximate number of Crumbs cupcakes sold in 2010. "We're not very good at math, but is making around 20 cents profit per cupcake a business you want to be in?" asks Raphael Brion at Eater.

$3.75

Cost of the typical Crumbs cupcake, "an oversize confection in flavors like apple cobbler, cookie dough and dulce de leche," according to The New York Times

590

Number of calories in Crumbs' signature "Half Baked" cupcake, which its website exhaustively describes as "marble cake filled with white butter cream, topped with half vanilla cream cheese frosting mixed with chocolate chip cookie crumbs and half chocolate fudge mixed with brownie pieces and covered with chocolate chip cookie and brownie pieces"

2000

Year that a Magnolia Bakery cupcake was first featured on "Sex and the City"

1

Number of Magnolia Bakery locations in existence at that point

6

Number of Magnolia Bakeries now open, with locations in New York City, Los Angeles, and Dubai

5

Number of new stores Magnolia is reportedly hoping to open in the following locations: Chicago, Boston, Long Island, New Jersey, and New York City

2003

Year that a New York Times' report on "cupcake mania" noted that NYC cupcakes, like those from Magnolia Bakery, "are not lopsided school-bake-sale affairs. They are art, they are fashion, they are a tourist attraction and they can be big business."

2009

Year that Daniel Gross at Slate predicted the cupcake market bubble would soon burst. "Cupcakes are having their moment, no question, and many could make sweet profits," Gross said. "But remember what always happens after a sugar rush: a crash."

Sources: Marketplace, The Street, New York Times (2), Eater (2), Slate, Magnoliabakery.com, Crumbs.com