About six weeks after its parent company Outfox Hospitality suddenly ceased operations and caused an uproar in the c-store and grocery industries, bankrupt retailer Foxtrot Market is reemerging under the leadership of its founder, Mike LaVitola.
LaVitola started Foxtrot in 2014 but moved into a chairman role last year shortly before the company merged with Dom’s Kitchen & Market. Last week, he revealed plans to reopen several Foxtrot locations across Chicago, Austin and Dallas this summer in what should be one of the more closely watched retail happenings in the coming months.
C-Store Dive spoke with LaVitola about Foxtrot’s recent struggles, his plans to revitalize the upscale retailer and how he aims to regain trust from former employees and vendors.
This interview has been edited for length and clarity.
C-STORE DIVE: Before I ask some questions, can you give the big-picture rundown of what’s happening?
LAVITOLA: So obviously it's been a really challenging couple of months here. The closures of the stores were super sudden and super unexpected, including to me. But over the last couple of weeks, an investor has come forward and got a deal done to buy the assets so that the brand could be restarted, and I was excited to help them do that. So we're going to be reopening stores in Chicago and then in Texas starting later this summer.
Last month, a holding company called Further Point Enterprises acquired Foxtrot’s assets. Is that the company you’re with now?
LAVITOLA: Further Point is an investment fund that put the deal together and funded it, and then they started a new entity that will effectively be Foxtrot going forward. I’ll be the executive chairman of that company.
I know the assets that Further Point acquired were for 15 stores — 10 in Chicago, three in Dallas and two in Austin. I’m assuming those are the same 15 stores you plan to reopen?
LAVITOLA: Yeah, we've got about a dozen secured right now, and then we are hopeful that another three or four will come along as well.
When should we expect these stores to start opening?
LAVITOLA: Our goal is to open the first two within six to eight weeks. Because this started over as a new company, it means it needs fresh licenses, and so we're going through those processes, and that's really what's dictating the store opening timeline. So again, the first stores we hope to have open in 6 to 8 weeks, and then the rest kind of opening up throughout the rest of the year.
So you think by the end of the year all of the stores will be open?
LAVITOLA: That’s the plan — yep.
Are there any ties to Outfox and Dom’s, or are you completely separate from those companies now?
LAVITOLA: It’s a completely separate company.
The merger with Dom’s happened shortly after you moved from Foxtrot’s CEO to chairman. So when the deal happened, how did that process unfold from your perspective?
LAVITOLA: I wasn't super close to the merger, but what I can say from more of a customer standpoint is that I was excited for it. I thought both companies were strong and [had] kind of complementary strengths. On the Foxtrot side, I think the cutting edge merchandising and the coffee and private label were really strong. Dom’s was very strong in their prepared food program, and obviously had a long pedigree. So I was excited for what I thought it could do for the combined company. And obviously, I was surprised to see it fold so quickly.
But I think what happened was, the combined companies still had a very large overhead, and in an environment where profitability is prioritized, didn't get there fast enough. I really do think it was as simple as that.
Mike LaVitola
Founder, Foxtrot
What do you think happened that led to this downfall?
LAVITOLA: At that time, I was no longer an executive and no longer on the board, so I’m not incredibly privy to those conversations. But I think what happened was, the combined companies still had a very large overhead, and in an environment where profitability is prioritized, didn't get there fast enough. I really do think it was as simple as that. How everything happened and how everything went down was obviously incredibly sad and frustrating and disappointing.
Shifting back to the new stores: Any plans for the D.C. area? I know Foxtrot was starting to expand there before all of this happened.
LAVITOLA: We don't have any definitive plans on D.C. We're not planning to open them as part of this first wave. And that's simply because it's a smaller team and we really wanted to focus where we knew best, because our home market is in Chicago and in Texas. Focusing just on those markets allows us to execute really well, allows us to get deep with our vendors and ultimately, have a really solid play for operating. Because this came together so quickly — literally in the matter of weeks — we just needed more time to fully understand what that meant for the D.C. market.
Will you be re-hiring staff that was let go from the stores you plan on reopening?
LAVITOLA: The first priority is our former staff. We've been having really good conversations so far, but now that we actually have a better view on what stores are opening, we're able to engage more of them.
How about on the corporate level. Do you plan on building a new executive team?
LAVITOLA: It's a much smaller team going forward, but there are going to be a lot of familiar faces. We just started bringing back a small handful of folks this week, and it's primarily folks who have been at the company before in various roles.
What would you say to the former employees and suppliers who might have some anger and frustration towards this whole situation? How do you plan to get back their good graces?
LAVITOLA: By just being honest and transparent. They have a lot of questions, as do we, and I completely get it. We've just been having lots of really candid and thoughtful and, hopefully, heartfelt conversations.
For employees, there's a lot of discussion about our vision for the company moving forward and what that means for their careers. For our vendors, it’s redoubling down on why Foxtrot was started in the first place, which is finding the absolute best in food and beverage. That’s what’s going to be our backbone going forward.
