In 2005, pastry chef Candace Nelson opened Sprinkles, the world’s first gourmet cupcake bakery, in Beverly Hills. She mixed her first batch of cupcakes in a home KitchenAid mixer and built a brand that transformed cupcakes from simple kids’ treats into luxury desserts.
The business grew quickly during the 2000s cupcake craze. Sprinkles became famous for its long lines, celebrity customers, and a unique invention called the Cupcake ATM—bright pink vending machines that sold boxed gourmet cupcakes 24 hours a day. At its peak, Sprinkles ran 21 bakery stores and 25 Cupcake ATMs across six states and Washington, D.C. In 2012, Nelson sold the company to KarpReilly Capital Partners, a private equity firm based in Connecticut.
The sale price never became public, but it meant Nelson no longer controlled the business she created. She remained emotionally connected to the brand, but a private equity firm now made all the major decisions regarding spending, strategy, and the company’s future. These investment firms acquire companies, attempt to grow them, and then sell them for a profit.
Workers Left Without Warning
On December 31, 2025, Sprinkles abruptly closed all of its company-owned stores nationwide. The shutdown caught almost everyone by surprise. That morning, Nelson posted a video on Instagram saying she had learned just days earlier that her former company would close that same day. She called the news “completely unreal” and reminded people she no longer ran the business.
Workers at Sprinkles locations received almost no advance notice. Leslie Wynter, the manager at the Georgetown location in Washington, D.C., said corporate called general managers on a Monday. Employees learned on Tuesday that their store would shut down the next day. Nearly 30 workers at that store were suddenly laid off. Many had families and relied on health insurance from Sprinkles. Wynter said staff received no severance pay and no payment for unused sick time.
For hourly workers who relied on regular paychecks and benefits, the immediate job loss created significant financial difficulties. Employment attorney Nora Ezzat Cozzillio explained that the closure likely followed federal law. The WARN Act requires companies to provide 60 days’ notice before mass layoffs, but only when 50 or more employees at a single location are affected. Since the Georgetown store had about 30 workers, it fell below that limit. In Washington, D.C., and many other places, employment is “at will,” meaning companies can fire workers at any time without warning, as long as they don’t violate discrimination laws.
The End of a Trend
The Sprinkles closure marked the end of the cupcake boom that the company helped start. Other cupcake chains had already failed. Crumbs Cupcakes, once popular on Wall Street, shut down in 2016 after expanding too fast, and its stock crashed. Georgetown Cupcake survived but has since shrunk to just two stores. These failures showed that dessert chains built on trends, high prices, and lifestyle marketing struggled when customer tastes changed.
Sprinkles faced this shift while dealing with the demands of private equity ownership. By the mid-2020s, private equity firms held more than 30,000 companies, the largest number in years. These firms found it harder to sell companies or take them public. Average holding periods stretched to six years or longer. For Sprinkles, this meant operating under owners who were looking for profits in a tougher market while the cupcake trend was cooling.
After Georgetown workers learned they would get no severance, local residents and longtime customers organized fundraising efforts to help former employees pay basic bills. Wynter said these community donations became their real severance. In Beverly Hills, fans lined up on December 30 to buy the final boxes before the original store closed. Nelson, who had moved on to co-found Pizzana restaurants and launch an investment firm called CN2 Ventures, reflected publicly on the loss.
She said she still felt connected to Sprinkles and expected it to grow as part of her legacy. Retail experts predicted roughly 15,000 store closures across the United States in 2025, making Sprinkles one more example of how fast a 20-year-old brand can disappear.
Sources
WUSA9, ‘There is no severance!’ Sudden Sprinkles Cupcakes closure leaves employees without jobs, 5 Jan 2026
Business Insider, Sprinkles Cupcakes Is Closing, Says the Cofounder, 31 Dec 2025
Fox Business, Sprinkles Cupcakes permanently closing all stores after 20 years in operation founder says, 30 Dec 2025
Washingtonian, Georgetown Sprinkles store closes as the chain’s retail outlets are shuttered, 1 Jan 2026
Dealroom.net, Private Equity Statistics 2025: Deal Flow Exits & Trends, 6 Nov 2025
People Magazine, Sprinkles Founder Announces the Cupcake Chain’s Abrupt Closure, 31 Dec 2025