Exploited, Let Down, and Unfazed: What Small-Business Owners Are Saying About the Foxtrot Fallout

LaVitola gave a generic response, citing ambitious expansion plans for what began as a digital-only corner store and grew into a high-end convenience chain that secured $100 million in Series C funding in 2022. But on Tuesday, April 23, those plans ended with the abrupt closure of 33 Foxtrot locations (and two locations of upscale grocery store Dom's Market, which merged with Foxtrot into Outfox Hospitality at the end of 2023) across multiple states. The job loss is more than 1,000, according to Eater Chicago.

The Foxtrot co-founder might have given an uninspiring answer to a basic question, but his explanation of the company's business model -- and the contrarian beliefs Foxtrot was built on -- provides more insight into the current crisis the company's closure has created among small-business owners.

"The way we set up the company, what I'm into, what our team talks about every day is all around what the products are," LaVitola told Monocle. "[We asked] Is this the best product on the shelf? That is where all our energy went. Probably 90 percent of our time goes to that and 10 percent on the logistics and it felt like everyone else in the market had that in the opposite direction."

Foxtrot was built on sourcing and curating a selection of innovative products from small, independent businesses -- a rarity in the commercial retail space, where the expectation for most is that they must be a proven concept to be carried on store shelves. First-time makers could get their big break being stocked in Outfox stores, which were predominantly clustered in cities' most affluent areas. It's what consumers loved about the brand. It's what Foxtrot's business partners are most upset about now.

"We did not get any heads-up or a notice from the supplier side," says Jordan Tepper, co-founder of Chicago-based Apologue Liqueurs, a Foxtrot partner for the past seven years. "We did get an email today [April 23] from Outfox Hospitality after the news broke. But we have been fulfilling orders as early as last week. They're probably our second biggest retail partner."

Tepper is far from alone in these grievances. Several of the small-business vendors who spoke with Inc. about their business relationship with Foxtrot said they received purchase orders as recently as Friday, April 19. None of these business owners depended on Foxtrot as their sole source of income, and acknowledged the difficulties of others who did, although several asked to remain anonymous in the hope that their outstanding invoices might be paid out -- or, at the very least, that products they had delivered (some as recently as the day before the announcement was made) might be returned to them.

One vendor who spoke to Inc. wasn't holding out much hope of that after hearing from a general manager at Dom's Market that staff were walking away with products. The Washingtonian reported that staff were giving away wine in D.C., and the Chicago Sun-Times cited sources instructing staff to dispose of perishable items -- which staff ignored, instead arranging for the items to be donated to food banks.

"Foxtrot has always positioned itself as fairly high end, but didn't seem to want to pay for that," says Katherine Duncan, owner of Chicago-based Katherine Anne Confections, a high-end sweet shop whose products had been carried in Foxtrot for several years when orders suddenly stopped in the fall of 2023.

It's a sentiment echoed by Palita Sriratana, chef and founder of Pink Salt, a Chicago-based sauced goods company that also hosts Thai dinner pop-ups. Pink Salt was chosen from more than 400 candidates as the winner of Foxtrot's 2024 "Up & Comers" Award in the "Just Damn Good" category for its Thai-style roasted chili jam. Sriratana says the company's slowness in paying product orders meant she felt "surprisingly unfazed" by yesterday's closures. 

"They stopped ordering from me in February, just one month after I won the award," Sriratana says. "The sales should have continued through the whole year, but they didn't. The Up & Comers program was to highlight small makers, but in the end I felt exploited. The products were never reordered despite scaling up for their stores."

What partners of the brand are grieving the most is the emphasis both Foxtrot and Dom's put on highlighting and uplifting independent businesses. It's what drew Farah Jesani, founder of the Portland, Oregon-based South Asian beverage company One Stripe Chai, to Foxtrot, and why she spent six months pitching it.

"Life goes on," says Gray. "It's sad, because they really, really prioritized local and small businesses and there aren't that many specialty shops like this. To get to their scale -- that was just something that was pretty great about the brand, Dom's in specific. Because Dom's was a real grocery store."