You may have heard about the demise of Crumbs Bake Shop, the Manhattan-based bakery that had 48 stores in 10 states and one of the primary leaders of America's Great Cupcake Craze. Despite its renown, Crumbs shut off the mixers and closed its doors on Monday after years of declining sales and local competition. Many have heralded this downfall as the watershed moment for the "cupcake bubble"; the frosting-topped treat has had its heyday, been flooded into markets everywhere, and now must face defeat at the hands of lively pastry upstarts like the humble doughnut. But Arleen Scavone, founder of Sweet Arleen's bakery in suburban Los Angeles, doesn't believe a word of it. The baker is a three-time champion on the Food Network show, Cupcake Wars, and has now moved on to planning her domination of the Colorado market with locations in Aurora, Glendale and Broomfield.
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Sweet Arleen's opened at the height of the cupcake craze in 2008. After life as a senior vice president at a major bank, Arleen Scavone decided to move on to sweeter things. However, the move was not an end to her entrepreneurial career, but a natural extension of it. This 'banker turned baker' wanted to use her business acumen to branch out and do something which she could call her own, while still exercising her business muscles.
"Most of these [cupcake] places are opened by bakers and not businesspeople," Scavone says. "There's no business model." She remembers her time on Cupcake Wars fondly, but says that many of the stores competing would be closed by the time their episodes aired. Scavone attributes this to a lack of business models, which are second nature for her. In other words: she's not worried. These dark cupcake times are just separating the wheat from the chaff, and she believes her cupcake quality and brand have enough to weather the storm.
"Either I could have fun with food or loans," Arleen says. So instead of handling mortgages, she turned to her domestic passion: baking. While she spent time perfecting her cupcakes and bread puddings (also on offer at Sweet Arleen's) she also took over a year drafting marketing plans and branding options. When she opened Sweet Arlene's in Westlake Village, California, it's safe to say that Scavone was prepared to do business.
Scavone calls herself a businesswoman first and says that her experience in the financial world allows her to see the bigger cupcake picture here. Just like the financial institutions before and after 2008, cupcakes are going through a natural cycle of contraction, she says. In fact, the closing of Crumbs makes Arleen hopeful; she believes it's good thing for the "cycle."
Now that Sweet Arleen's has made a name for itself in the Golden State, selling all the cupcake classics alongside wilder flavors like Coconut Snowball, Pina Colada and mac-and-cheese bread pudding, Scavone wants to franchise. It's a move that she says she always planned on, and was built into that initial business plan. After all, she's used to national banking and managing, not focusing on a single store. It's all about the entire business for Scavone.
After extensive market research, Denver made it onto the top 20 most desirable bakeshop markets list, and is now the target for at least three new brick-and-mortar stores (and at least one truck) in Aurora, Glendale and Broomfield. Scavone attributes Denver's cupcake viability primarily to three reasons: a population density that can support more than one bakery, a food truck friendly atmosphere--she says that trucks are a key part of their business model and community engagement efforts, and the Mile High City's status as an up-and-coming culinary magnet. Arleen wants to throw her gourmet baked goods into that mix.
Although there has been no specific site selection yet (Scavone is still looking for potential franchisees), she hopes to have a store sold in at least one location by next year, with the others following soon after. Hopefully by then, the cupcake stock will be rising once again, and Scavone says that it's impossible not to like her recipe for success: using fresh fruit and flavors and a frosting that won't knock you into a diabetic coma. For now though, it seems Denver will be left to its doughnuts.