Foxtrot Waltzes Back After Abrupt Closures: Co-Founder Mike LaVitola On Reopening, Rebuilding Trust

Foxtrot co-owner and Chairman Mike LaVitola let out a sigh of relief when the company reopened the doors to some of its old locations and people streamed back in to try its custom coffee blends and emerging local brands.

There was no telling whether they would, given the way the upscale convenience store abruptly shuttered all of its locations in April 2024. The move left employees in the lurch, food rotting on shelves, landlords holding the bag and lawsuits brewing. 

Now, almost a year later, the small-format grocer is back with a new plan to rebuild and grow, according to LaVitola.

Foxtrot has reopened eight of its stores since September, six in Chicago and two in Dallas. It plans to reopen an undisclosed ninth former location in about a month and, soon thereafter, open a new store in Lincoln Park. The company is starting small this time.

“What's different this time, in my mind, has really been just going back to what the core of the business was a couple of years ago, which was a really specific take on curation, a simplified model and focusing on customer service,” LaVitola told Bisnow. “[It] sounds very basic and very obvious, but it wasn't like the stores needed to have a bunch of new programs or a bunch of new whizbang things happening. It was really, for us, getting back to basics.” 

The size of Foxtrot’s renewed footprint pales in comparison to its reach at its peak, before parent company Outfox Hospitality shuttered all of its 33 locations in Chicago, Washington, D.C., Austin and Dallas at the end of last April.

They were closed so quickly that employees shooed customers out of stores, locked the doors and left some perishables and prepared foods to rot. At the time, some of the retail experts Bisnow interviewed salivated over the premium real estate set to hit the market, as Foxtrot had stores at highly visible spots in desirable neighborhoods. 

Before the shuttering, Foxtrot occupied about 51K SF of Chicago retail space, according to data provided by Mid-America Real Estate Corp.

Foxtrot launched online in 2014 and opened its first store in Fulton Market in 2015 as it aimed to establish an upscale convenience store chain. It expanded to Texas and Washington, raising $160M in venture capital funding as of 2022.

The upscale retailer merged with high-end grocery chain Dom’s Kitchen and Market, creating Outfox Hospitality in late 2023 after both companies had secured money for expansion in the two prior low-rate years, according to Crain’s Chicago Business. The companies hoped a merger would reduce overhead costs and help the joint venture reach profitability. 

But when rates climbed rapidly and market conditions evolved, funding fell through. Outfox shuttered all Foxtrot locations at the end of April and filed for bankruptcy a few weeks later.

“It was really, really sad for a lot of people,” LaVitola said. “It was awful for the employees, it was awful for the vendors, it was awful for a great group of early investors who got kind of left. It was a really bad, really sad situation.”

In the months after the bankruptcy, LaVitola, who had been serving in an advisory role before the closing, worked with New York-based investor Further Point Enterprises to buy Foxtrot’s assets, according to Crain’s. Then, he got to work on re-leasing some of its old spots. 

Foxtrot’s conversations with its old landlords to re-lease some former spaces have happened on an individual basis, and they largely center on answering questions about what happened to the company in 2024 and what is different this time around, LaVitola said. Foxtrot returning the original management team that signed many of the original leases comforted some of the landlords, as did sharing data about store performance. 

Lavitola characterized the discussions as “good and honest” and “totally warranted and necessary.”

The company was also hit with a wave of legal action in the wake of its stores shuttering last year.

Former employees filed at least three lawsuits against the company, alleging it didn't properly notify workers of impending closures and violated worker protection laws. Two suppliers sued Foxtrot for allegedly failing to pay for more than $208K in produce and other goods before the shutdown.

The Illinois Department of Labor continued to seek recovery of $3.8M-plus in back wages and benefits for more than 350 displaced workers as of late last year. 

LaVitola said conversations with the vendors to rebuild trust were essentially like reintroductions from the Foxtrot concept's first launch. He said “substantially all of them” are now back on the retailers’ shelves. 

“I wasn't going to come back and do this all over again if we didn't have the vendors on board,” LaVitola said. 

In many of the locations Foxtrot has reopened, the deal terms stayed the same, he said. In some cases, the company was able to extend the term length, which allowed it to invest a little more in the stores.

The company could have operated more stores in this initial stage of its reboot, but some new lease terms didn’t make sense from a financial perspective, LaVitola said. 

“Honestly, I wish we had more stores,” LaVitola said. “We unfortunately lost several stores that were really, really strong performers of ours. … Given the way that sort of everything happened, the old company lost the leases. And in doing so, many of the rents went up 30% to 40% since the time that we had signed those deals.”

Site selection was one of the things Foxtrot took a lot of pride in early in its growth, LaVitola said. Instead of setting up shop on streets with a lot of other popular retailers, the company chose locations a block or two into the neighborhood to try to capture where the residents of the neighborhood “hang out,” he said. 

Retail rents in many of those locations were lower, and Foxtrot was able to better capture foot traffic, LaVitola said. As neighborhoods have shifted and evolved over the past couple of years, the company will go through that process again. 

Foxtrot’s 10th store, a new location that LaVitola said will be announced in the coming weeks, will be indicative of that strategy, a pivot from a store on a prime street where rents have gone up significantly. 

“We found another location that we loved just as much, but we were able to get more square footage, a really nice patio, and it's a block or two deeper into the neighborhood, but with a much more reasonable rent,” he said. 

As far as expansion plans beyond that store, LaVitola said the company will be patient on the real estate side. Foxtrot will keep its eyes on great locations in neighborhoods it has operated in. 

“You will definitely see more Foxtrot stores, but certainly at a more measured pace than in the past,” LaVitola said. “For better or worse, we have a really good idea where to put those stores, because we, you know, lost a lot of really good ones.”