Cupcakes Forever! It's All Up to You, G'town Cupcake

"They are everywhere ... like ants": Bakery owner

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    NEWSLETTERS

    NBCWashington.com
    C'mon little cupcake, you can survive the bubble.

    Local business owners are keeping their eye on Georgetown Cupcake and its new location in Bethesda, and with good reason.

    If it beats out all the other sweet competition in the area and makes enough to pay its high rent bills, cupcakes might outlast the recession, not just preserve part of the local the economy.

    Despite the recession, or maybe because of it, mid-Atlantic cupcake bakers are growing their profits and their customers' waistlines -- a couple of dollars at a time.

    For example, at Georgetown Cupcake -- where lines sometimes include 100 customers snaking out the door and along the street -- a treat is only $2.75. For customers, that's much easier to swallow while still keeping their personal spending belt on tight.

    Shelley Santora Jones, a self-proclaimed cupcake enthusiast from Arlington, said she's tasted confections from nearly every
    cupcakery, bakery and store in the area.

    "For me, it's a personal-size treat. You don't have to share it with anybody. It's a guilt-free, happy treat that takes you back to
    your childhood,'' Jones said. "Do I think it's a stable business? No. I wouldn't invest in a cupcake store.''

    But for businesses, such a low price, high demand item makes it much easier to survive this economy. At least six cupcake
    businesses have opened from Bethesda to Washington to Alexandria have opened in the last two years and more are expected.

    "They are everywhere ... like ants,'' said Leslie Goldman-Poyourow, a 14-year baker who operates Cakes by Leslie in
    downtown Bethesda.

    And Georgetown Cupcake is opening a sit-down restaurant on M Street and a downtown Bethesda store for the simple, affordable
    treats. That's because the store has customers who regularly pay people to stand in line for them or use their cell phones while in
    line just to see which varieties of the thousands made every day are still available.

    Cupcakeries in the region vary from a vegetarian venue and online-only companies. The bakers that have been around a while are
    CakeLove, Furin's, Baked & Wired, Best Buns and Just Cakes.

    Potomac has its own shop in Blushing Bakeshop and Alexandria's residents can go to Lavender Moon. In Greenbelt, Rhonda's Cupcakery is serving up the desserts each day.

    But such growth and popularity has a limit, at least two businessmen think, because cupcakes could be a fad.

    "We are coming close to a bubble now,'' Red Velvet owner Aaron Gordon said. "One or two more shops is about as much as the public can support. After that, the folks with the highest-quality cupcakes and best locations will be the ones who survive.''

    Something Sweet co-owner Bo Blair agrees. "As more and more places pop up that sell cupcakes and try to take advantage of the
    wave, the more they lose their uniqueness and the aura that you are getting something special.''

    Every one of the owners is spending serious money and investing lots of time and energy into their effort to be the among the few cupcakeries at the top of a growing market.

    "I lost a lot of sleep, a lot of sleep before I signed that lease agreement,'' Red Velvet owner Aaron Gordon said. The $35,000 chef fee he pays and the $400,000 of his own money he invested are worth it to him, they're what it takes.

    "You have to have top quality and a great location to keep up,'' he said. He stays open until 1 a.m. on weekends to capture a late crowd coming out of the Verizon Center and sells 1,500 a day.

    He expects to make $150,000 to $200,000 in profit this year after earning $1 million in revenues.

    Sisters Sophie LaMontagne and Katherine Kallinis ended careers in venture capital and marketing, respectively, then worked for a
    year on a business plan before opening Georgetown Cupcake.

    Seventy percent of their business comes from walk-ins and the pair have worked until 3 a.m. before cleaning grease traps. They
    work most days and employees must sign nondisclosure and noncompete agreements, to protect their kitchen's treasures.

    "We honestly thought we would have a quiet little bakery,'' Kallinis said.

    In case that's what Gordon's Red Velvet shop becomes, he's built a frozen yogurt shop next door. Similarly, Bo Blair, the owner of
    Something Sweet, is creating a subniche of his own by opening his shop between Two Amys, Cactus Cantina and Cafe Deluxe.

    "We just feel its a perfect spot for all those people coming out after dinner,'' said Blair. He wants to make $800,000 gross in the first year and be cash positive before this year ends.

    "As with anything in America, things get real hot and tend to die off after a point,'' he said. "That will happen with cupcakes.''