Sprinkles Cupcakes, a chain of scratch-made gourmet cupcakes, cookies and cakes that got its start in Beverly Hills and was later bought by a private equity giant, is closing all stores on Wednesday, Dec. 31.
“A few days ago, I learned that Sprinkles Cupcakes, the company I started in 2005, and then sold to private equity in 2012, will be closing its bakery doors today,” founder Candace Nelson — an investment banker turned baker — said Wednesday in an Instagram video post.
Nelson opened the first Sprinkles in 2005 in Beverly Hills.
The chain, which was bought by investment firm KarpReilly LLC, operated 21 stores and 25 ATMs that dispensed fresh cupcakes 24 hours a day, seven days a week, in California, Florida, Nevada, Texas, Utah and Washington, D.C.
Spokespersons with Sprinkles Cupcakes and Greenwich, Connecticut-based KarpReilly were not immediately available for comment. However, an employee at Sprinkles’ Scottsdale store said that orders were no longer being accepted.
“After careful and thoughtful consideration, we’ve made the difficult decision to transition away from an operating company owned by Sprinkles Bakeries,” the worker read from a statement. “As a result, our company owned locations will be closing, with the final day of service scheduled for today.”
The worker, who declined to provide their name, would not comment further.
On opening day 20 years ago, Nelson sold 200 cupcakes in two hours, attracting celebrity devotees including Tyra Banks and Barbra Streisand. Nelson’s concept pioneered an explosion of specialty dessert and haute cupcake shops in Southern California.
The news of the chain’s closure hit the founder hard.
“Just to say that out loud is completely surreal. Even though I sold the company over a decade ago, I still have such a personal connection to it, and this isn’t how I thought the story would go. I thought Sprinkles would keep growing and be around forever,” Nelson said. “I thought it was a going to be my legacy. It’s hard to describe how I’m feeling right now. But one thing is for sure, I’m incredibly grateful for all of the joy our cupcakes brought to millions of people over the years.”
KarpReilly has a portfolio of 44 companies listed on its website and invests in small to mid-size consumer growth companies. Some of those businesses include Newport Beach-based California Fish Grill, San Diego-based Burger Lounge and downtown-Los Angeles-based women’s clothing brand Christy Dawn. Sprinkle Cupcakes was no longer listed as a current investment.
In 2007, the private equity firm acquired a majority position of Irvine-based Habit Burger Grill before taking it public in 2014, later selling in 2020 to Yum! Brands, the parent of KFC, Pizza Hut and Taco Bell.
KarpReilly manages funds and affiliates with capital commitments in excess of $800 million.
“I have so many amazing Sprinkles memories, which I plan to share over the next few weeks as I process this news,” Nelson said. “I built this company as a point of joy and connection.”
Over the years, Sprinkles was sold out of a cupcake truck and its proprietary mixes from more than 250 Williams-Sonoma stores throughout the United States and Canada. In 2012, the company debuted its cupcake ATM, dubbed as the world’s first such device.
Sprinkles also sold its bakery goods at Disneyland in Anaheim and through ATMs, such as those on the campus of the USC and the Little Italy neighborhood in San Diego. In Southern California, Sprinkles had stores in Beverly Hills, downtown Los Angeles, Irvine, La Jolla, Manhattan Beach, Newport Beach and The Grove shopping complex in the Beverly Grove area of Los Angeles.
The cupcakes were made fresh in small batches throughout the day and contained no preservatives, trans fats or artificial flavors, according to the company.
As of Wednesday morning, Nelson’s announcement on Instagram had received more than 360 comments on her post and nearly 2,100 likes.
“I’m so sorry. Damn PE (private equity) really does know how to f… up a good thing,” wrote one commenter under the handle of codiesanchez.
“Wow! Candace!!! That must be very tough. I’m happy you sold the company when you did, but truly sorry the new team was not able to grow and thrive with your strong foundation: Truly the end of an important chapter for you,” wrote another poster, faith_wheeler7. “May one door close so another may open.”
Another poster, tayywalkerr of San Diego, wrote that she was speechless over the news. “This is so hard to hear. These cupcakes were my obsession for years. Still my favorite cupcake ever. You built something so amazing & always brought joy to anyone I bought cupcakes for.”
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