Crumbl competitor shutters all stores with little notice

Most companies wait until after the holidays to deliver bad news.

It's not unheard of for people to be laid off right before Christmas, or in the week between Christmas and New Year's, but doing that is seen as especially cruel.

Many companies, however, simply do what they plan to do without regard for the holiday season.

"Historical data shows December often ranks as the second-highest month for layoffs and discharges, going back to 2000, according to the Bureau of Labor Statistics. But the month when companies consistently cut the most workers is coming soon —January," Mint.com reported.

Waiting until January for layoffs isn't just about being kind, according to Jonathan Reynolds, CEO of recruiting agency Titus Talent Strategies. He advises companies to wait until the new year.

“This is where companies really need to think about their talent reputation,” he said. “Some people who are a little bit more risk-averse would rather go to an organization that cares for its people first.”

Some companies, however, simply have no option, and that appears to be what happened to Sprinkles Cupcakes, which is winding down operations at all remaining locations, according to multiple national media reports.

Sprinkles Cupcakes' nationwide closure

Sprinkles has not shared a formal statement about its shutdown to media, but the news has been confirmed by multiple major news outlets.

"Sprinkles, the iconic California cupcake company, has announced a 'winding down' of operations at its remaining 15 retail locations, blindsiding employees last minute with the not-so-sweet news," the New York Post reported. "Salty employees got the notice on Dec. 30, saying Sprinkles would start an “orderly wind-down” of the company beginning Dec. 31."

The chain's website has no mention of the shutdown.

Sprinkles Founder, Candace Nelson, who sold the brand in 2012, shared a statement on her Instagram page.

"Today is Sprinkles’ final day. As many of you know, I started Sprinkles in 2005 with a KitchenAid mixer and a big idea. Over the years, we expanded across the country and launched the Cupcake ATM," she wrote, noting that since she sold the brand, she has no ownership or operational involvement in the company.

More Restaurants 

• Taco Bell and KFC work on simplifying their restaurants
• Chick-fil-A making major change to 425 restaurants nationwide
• Bankrupt beer and pizza restaurant chain closes locations
• Restaurant chain famed for rude waiters closes multiple locations

"Still, it’s surreal to see this chapter come to a close - and it’s not how I imagined the story would unfold," she posted. "I’m deeply grateful to the fans, customers, and community who showed up, celebrated with us, and made Sprinkles part of their traditions — and to the team who made it all happen. I’ll always be proud of what we built."

She also shared that her "heart" was with the company's employees.

Sprinkles shutdown, what we know

• Sprinkles Cupcakes is reportedly closing all of its retail bakery locations nationwide with the final day of operation as December 31, 2025, and doors expected to be shut by January 1, 2026, according to the New York Post.
• The closure includes all storefronts and, apparently, the famed Cupcake ATM locations, the automated vending-style machines that helped make the brand a viral phenomenon when introduced in 2012, reported Parade.
• Staff were reportedly given extremely short notice, in some cases just one day, before being laid off, according to employee posts on social media, addedParade.
• Sprinkles was founded in Beverly Hills in 2005 and helped popularize the gourmet cupcake trend, expanding to about 20 retail locations across six states plus Washington, D.C., and dozens of Cupcake ATMs nationwide, according to its website.

In my experience covering retail closures, dessert-only chains face a uniquely difficult repeat-visit challenge.

As a fan of cupcakes, I have visited Sprinkles on occasion, but the business model always seemed flawed to me. Customers might go get coffee or other beverages a few times a week, or even every day, but cupcakes seemed too indulgent to drive the repeat business needed for the chain, or really any very-limited menu dessert chain to succeed.

Rival Crumbl has also struggled

Building dessert-only businesses has been very challenging and overly dependent upon social media. Crumbl, the once hot cookie chain, has suffered as its no longer the social media sensation it once was.

“Social media trends come and go, which is why it isn’t always the smartest idea to go all-in at the height of your 15 minutes of fame, which is arguably what Crumbl Cookies has done. The chain expanded massively throughout 2022 in an effort to meet the soaring market demand generated by videos tagged #crumbl on TikTok,” Mashed shared.

The chain has closed a number of locations over the past three years, according to a Dec. 20 article from TheStreet.

• Crumbl closed 7 stores in 2023: These were the first permanent closures in company history. These included four in California, and one each in Florida, Georgia, and Utah, according to QSR Magazine.
• 2024: Further closures, with at least 12 locations reported closed during 2024, according to the company’s Franchise Disclosure Document (FDD). These closures were excluded from the annual performance reporting, indicating they occurred at various points in 2024.
• Public closure lists compiled from local reporting include stores such as Norwalk, Conn., and others in Colorado, Pennsylvania, Tennessee, Florida, and Utah, and that does not likely account for every closed store.
  Individual closures reported locally: For example, a Norwalk, Conn., Crumbl Cookies store closed after only about one year in business, underscoring uneven performance among locations, Patch reported.
• More locations have closed in 2025, although the company has not confirmed that.

Both Sprinkles and Crumbl faced a challenging operating environment for the past two years.

"The restaurant industry faced significant headwinds in 2024, including higher prices, shifting consumer spending patterns and increased competition," said Kevin Schimpf, senior director of industry research at Technomic in the research firm's annual sales report on the top 500 restaurant chains.

Restaurant Business and Technomic data have shown that traffic growth for specialty restaurant concepts has lagged broader industry averages over the past two years.

Sprinkles did not respond to a request for comment by publication time and has not issued a public statement on its website or social media channels.

Related: Starbucks store hours for New Year's Eve and New Year's Day 2026