Popular retail chain skips bankruptcy, moves right to liquidation

It has been a miserable period for retailers: Companies that were once unqualified success stories have been unable to recover from covid-pandemic-era losses.

Profit margins in retail, especially food-related retail, generally are thin. That makes the difference between success and disaster thin as well.

Many retailers entered 2020 healthy but had to take on debt during the pandemic’s lockdown period. Some companies had to shut down or shift their focus to lower-margin items that consumers needed to get through that period.

It was a time when even if you could keep your doors open, costs were higher and sales were lower. Even as sales patterns returned to normal, servicing the debt created a burden that some companies could not carry.

That led to a number of bankruptcies with big names, like Bed Bath & Beyond, Tuesday Morning, and Christmas Tree Shops, liquidating. The situation also devastated the craft-brewery market and caused multiple regional furniture chains to close.

Now, the retail apocalypse has claimed another victim. A popular regional upscale convenience store/small grocery has closed its doors in preparation for its assets to be liquidated.
Urban convenience store and delivery chain Foxtrot Market and small-format grocer Dom’s Kitchen & Market unexpectedly closed their doors on April 23, Supermarket News reported.

Foxtrot had 33 locations in Chicago, Washington, Dallas and Austin. Dom’s had two stores in Chicago. The two merged a few months ago.

The company spoke of the closure on its website, which was replaced with a single page that contained a letter to its customers.

“We explored many avenues to continue the business but found no viable option despite good faith and exhaustive efforts,” the company posted. “This decision was not made lightly, and we understand the impact it will have on you, our loyal customers, as well as our dedicated team members.”

The chain has not filed for bankruptcy and customers held out hope that a buyer would step in or the company would find a lifeline. That’s not going to happen.
A public notice that makes Foxtrot’s fate clear was filed.

“On May 10, 2024, at 10 a.m. Pacific Time, a foreclosure sale of substantially all of the assets of Foxtrot Ventures Incorporated; Foxtrot Retail, Inc.; Foxtrot Retail D.C., LLC; Foxtrot Intermediate Texas, Inc.; Foxtrot Retail Texas, Inc.; and Foxtrot Holdings Texas, Inc. will take place via Microsoft Teams video conference conducted by DLA Piper LLP (US), counsel to the debtor’s secured creditor JPMorgan Chase Bank, N.A. The sale may be canceled or continued from time to time at the direction of JPMorgan Chase Bank, N.A.,” according to the notice.

In theory, a buyer could step in and buy the assets needed to reopen the chain, or at least parts of it.

“The debtors were in the business of retail food and beverage sales. The assets to be sold include inventory, intellectual property, accounts, chattel paper, documents, furniture, fixtures & equipment, general intangibles, and goods,” the filing continued.
Dom’s Kitchen and Market was not mentioned in the public notice.

Foxtrot has not filed for bankruptcy and the company’s closure was not expected. The company’s more than 300 employees did not get severance and there are multiple lawsuits related to Foxtrot’s owners not providing legally required warnings to workers.

The company’s owners tried to be gracious in their farewell message.
“We want to express our sincerest gratitude for your support and patronage throughout the years. It has been our highest honor to elevate the everyday and create a remarkable shopping experience for people who love food as much as we do,” Foxtrot said in its farewell letter.

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