Crumbs closes five million
Crumbs Bake Shop, Inc. ("Crumbs") (NASDAQ: CRMB), the largest cupcake specialty store chain in the US, today announced the closing of a $5 million senior secured credit facility. The lender, Oklahoma-based Fischer Enterprises, has funded an initial $3.5 million and has committed to funding an additional $1.5 million on or before April 1, 2014. The combined proceeds will be used to implement the new business plan that Crumbs has been developing over the last two quarters. This plan focuses on aggressively developing a licensing program, strategically adding franchised stores to complement Crumbs' successful company-owned stores and the ongoing initiative of closing or co-branding existing stores that are currently unprofitable.
Fischer Enterprises is the owner of Dippin' Dots, L.L.C. (www.dippindots.com), the maker of the iconic flash frozen ice cream and treats. Crumbs and Dippin' Dots intend to explore possible synergies that will be created in the areas of co-branding, cross-branding and distribution.
"We are thrilled to work closely with Fischer Enterprises as Crumbs begins the next phase of the growth and evolution of the brand," says Edward Slezak, interim CEO and general counsel of Crumbs Bake Shop, Inc. "This transaction, coupled with Fischer Enterprises' experience and expertise in franchising, will be instrumental as we execute our new business plan. We will provide greater detail about the aforementioned business plan during our fourth quarter earnings call," he adds.
"We view our investment in Crumbs as a unique opportunity to work with a well-known company with a recognized brand name and established customer base," says Scott Fischer, COO, Fischer Enterprises. "We believe that joining forces with Crumbs will allow us to create opportunities that could result in a win-win situation for both Crumbs and Dippin' Dots. The areas of operation and sales concepts for the two companies are complementary and thereby could potentially result in increased market exposure for both."