Foxtrot is planning its return six weeks after stores had signs reading “goodbye” and “we are closed” taped to the doors.
The founder of the specialty grocery store, Mike LaVitola, told Crain’s Chicago Business he plans to reopen about a dozen Foxtrot stores — with two set to reopen as early as this summer.
Foxtrot’s social media and website teased the grocer’s comeback on Wednesday.
“A new Foxtrot with some old friends,” Foxtrot’s website reads. “Coming soon.”
Foxtrot’s first reopened locations will likely be the Gold Coast and Old Town, LaVitola told Crain’s. He said Foxtrot will be “like a new startup again,” though it’s retaining the Foxtrot name, intellectual property and many of its previous locations.
The revival comes about six weeks after the company closed all its locations April 23 to the surprise of workers and customers alike. It coincided with the closure of all Dom’s Kitchen & Market locations, another Chicago-based specialty grocer with which Foxtrot had merged six months prior. Outfox Hospitality was born from that merger, with the deal closing before the end of 2023.
Former employees said they learned of the mass layoffs and store closures the same day — and one Foxtrot vendor said he found out on Instagram. At least two class-action lawsuits have been filed by workers who say the companies violated the state and federal Worker Adjustment and Retraining Notification Act by failing to properly notify employees that they would be laid off.
Foxtrot operated 15 locations in Chicago and 17 stores across Dallas and Austin, Texas, and Washington, D.C. Dom’s Kitchen had two locations, 2730 N. Halsted St. and 1233 N. Wells St., and planned to open a third location at 30 W. Huron St. this summer.
There are no plans to reopen Washington, D.C., locations, LaVitola told Crain’s. Foxtrot plans to grow in its two home markets: Chicago and Texas. Growth could include Chicago’s suburbs.
Being smart about locations would be key to Foxtrot’s return to market, said Jonathan Lazarow, a merger and acquisitions lawyer.
He said a merger like Foxtrot’s is expensive — and that’s on top of operating in high-rent neighborhoods where profit margins tend to be tight.
“I think what (LaVitola) was able to do is to hope that by reopening the business, by getting back to the market, he could refine his vision and understand what he did wrong, and then focus on on the core competencies that he thought made it special,” Lazarow said. “Foxtrot was an outlet where emerging and new brands could actually get into the door.”
Outfox Hospitality filed for Chapter 7 bankruptcy in May. Chapter 7 bankruptcy involves the sale of some assets to pay back creditors — but in its filing, the company indicated that there would be no money left to pay unsecured creditors after administrative costs are paid.
On May 10, an online foreclosure sale of Foxtrot’s assets was held through Microsoft Teams. Assets sold included “inventory, intellectual property, accounts, chattel paper, documents, furniture, fixtures & equipment, general intangibles and goods,” according to a public notice.
Further Point Enterprises purchased the assets for more than $2.2 million, Crain’s reported. Dom’s assets were also being auctioned, but there was no buyer, according to the report.
Crain’s reported Wednesday that Further Point Enterprises’ David Magruder will serve as an interim chief financial officer and board member for Foxtrot.
The closure of Foxtrot and Dom’s stores also meant the shuttering of Foxtrot’s commissary in Pilsen, where food was prepared and packaged. Former workers held a rally April 26 outside the commissary to demand back pay from Foxtrot after collaborating with workers rights organization Arise Chicago to file charges with the Illinois Department of Labor.
Most of the former workers were yet to hear the news of Foxtrot’s reopening as of Wednesday afternoon, according to an Arise spokesperson, and have found new jobs. It’s unclear if the commissary will reopen.
A lot of investors and money are on the sidelines in retail right now, Lazarow said, mirroring consumers cutting their spending due to inflation. Lazarow thinks Foxtrot needs to focus on its messaging to be more successful than its predecessor.
“They’re going to need to think about what the messaging is and be attractive growth opportunity-wise to [investors],” he said. “I think Foxtrot has an opportunity — they have some great stories to tell. I think they can earn back trust with the consumer.”
