New York’s Magnolia Bakery Offers Lessons On Small-Business Success
In the mid-1990s, chocolate chip cookies and ice cream with butterfat were in vogue. But pity the forgotten cupcake .
When Magnolia Bakery, specializing in cupcakes, opened in a tiny 616-square-foot-store in 1996 on a picturesque West Village corner in New York City, few expected it to last. How many cupcakes could be sold at $1.25 each (now $2.75) to support the expensive rent? Moreover, cupcakes were passe.
But the nostalgic feel of the store’s apron-wearing staff coupled with the sugary taste of the icing helped draw crowds. When TV’s Sarah Jessica Parker and her “Sex and the City” entourage munched on the cupcakes in several episodes in 2000, Magnolia morphed into a cult bakery. It’s also become a parable of small-business success.
By 2010 Magnolia had opened three more New York outlets in Grand Central Terminal, Rockefeller Center and the Upper West Side, and one in the Persian Gulf city of Dubai inside a Bloomingdale’s outlet. Another will debut in Los Angeles in May. Magnolia’s has also spawned a host of imitators opened by former Magnolia employees.
Despite its success, there are no assurances that Magnolia’s expansion will succeed. Unless it maintains quality, hires the right people and sustains word of mouth, analysts say it could turn into yesterday’s flavor of the month.
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