Why is Sprinkles Cupcakes closing? TikTok critics focus their ire on private equity as beloved bakery folds

Sprinkles Cupcakes, the company known for its sweet treats and iconic cupcake ATMs, is no more.

Candace Nelson, the company’s founder, ended 2025 by confirming that all Sprinkles locations were shutting down as of December 31.

In a video shared to Instagram and TikTok, Nelson said, “This isn’t how I thought the story would go. I thought Sprinkles would keep going and be around forever. I thought it was going to be my legacy.” 

Sprinkles has yet to make a formal announcement, but its Instagram profile appears to be gone and the store locator tab on its website now produces an error message. Fast Company reached out to the brand’s PR contact for additional details.

Nelson started Sprinkles in 2005, but has held no stake in the company since selling it to private equity in 2012. KarpReilly LLC announced an investment in Sprinkles shortly after. 

That decision over a decade ago has led many social media users to question exactly how Nelson thought Sprinkles would live on and prosper under private equity ownership.

While Nelson asked people to share their “special Sprinkles memory or story” with her, many of the comments under her post instead take a vehemently anti-private equity stance—and blame her for the demise.  

Below is just a sample of the types of comments Nelson has received: 

• “Selling to private equity was the beginning of the end.”
• “What did you expect? Private equity has literally NEVER made things better for customers only for board members’ and investors’ pockets.”
• “You sold it to PE and expected it to not close?? What planet are you living on? I don’t begrudge you for selling as that’s entirely your choice but to think any PE firm cares about a company in the slightest is insanity.”
• “Legacies can’t be abandoned before they’re legacies.” 

PE fingerprints on many retail bankruptcies

In recent years, private equity deals have appeared to play a role in the dismantling of a number of legacy retail brands, including restaurants Red Lobster and TGI Fridays, and fabrics chain Joann Inc. Private equity firms have a reputation for stripping down companies’ parts and leaving them saddled with debt, sometimes leading to bankruptcy.

Fast Company has reached out to KarpReilly for comment and will update this post if we hear back.

Individuals in the comment sections also claim that Sprinkles employees were blindsided with only one day’s notice and no severance.

In response to one such claim on Nelson’s TikTok post, a purported former employee wrote, “Some of us don’t have backup plans we loved sprinkles and planned to be here forever.”

Nelson responded to the above comment, “I’m so sorry this is heartbreaking.”

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