Dom’s Kitchen and Foxtrot close abruptly, bringing end to high-flying expansion plans

Dom’s Kitchen & Market and Foxtrot shuttered Tuesday five months after they announced plans to merge, marking an abrupt end to two Chicago-based startups with high hopes for expansion in the upscale specialty grocery market.

“We explored many avenues to continue the business but found no viable option despite good faith and exhaustive efforts,” Dom’s said in a statement posted on the company’s website.

“We understand that this news may come as a shock, and we apologize for any inconvenience it may cause,” the statement said. “We genuinely appreciate your understanding during this challenging time.”

Workers outside the Dom’s in Lincoln Park Tuesday morning told the Tribune they were surprised by the news. Many declined to share more information, saying they were not supposed to comment.

The company’s statement said all operations were ending Tuesday, the stores were no longer taking deliveries, store credits were not available and “all customer-facing operations are disabled.” In the afternoon, Foxtrot’s website was updated to include the same statement.

Jay Owen, a co-founder of Dom’s, did not immediately respond to requests for comment, nor did former CEO Don Fitzgerald, who had been slated to serve as Dom’s president and chief operating officer during a transition period for the merger.

Handwritten signs on the door at a Foxtrot in Lakeview said “closed for good.” By the early afternoon, they’d been replaced by printed signs that said “As of today, we are closed for the final time. Thank you for the time we had together.” At Dom’s Lincoln Park, signs read: “Hey neighbors, Dom’s is saying goodbye & we’re shutting our stores and app down. Thanks for eating & enjoying with us.”

Workers inside the store’s front doors told shoppers who approached, some in states of disbelief, that the store was closed. “Why did you guys close?” one woman asked shortly before 11 a.m. “We can’t say that,” responded a Dom’s employee. Inside the store, workers hugged.

A Foxtrot barista in Lakeview said she found out about the closure midway through her shift Tuesday. “I opened, so I got there at 6 a.m.,” she said. “And we didn’t have a lot of our stuff in stock that we normally do.” Around 10 a.m., an assistant manager broke the news to workers over the phone, the barista said, after which employees had to start kicking customers out of the store.

“I was scheduled until 1 (p.m.),” she said, “but the whole company’s shutting down at noon.”

The barista said she received an official email from the company after she’d already gotten home from work.

A kitchen manager at Dom’s said he found out Monday stores would be closing, but didn’t know how soon until shortly after he showed up at work Tuesday.

Just after 10:15 a.m., the kitchen worker said, “Somebody came out of the kitchen and was like, ‘Y’all might as well stop cooking because the store is closing at 12.'”

Employee Luis Muralles said he found out about the closure when he came into work around 11 a.m. Tuesday. Muralles, who had worked for Dom’s since September, said it had been a good place to work; the company had accommodated his disability and doctors’ appointments. “Everything was great,” he said, “until today.”

An FAQ page provided to workers via email, which the Tribune reviewed, stated that workers would be paid for hours worked through Tuesday. The FAQs state that employees would not be paid out for unused sick time but would be paid out for unused vacation time.

Employees with health insurance would receive their benefits through the end of the month, according to the FAQs, which also linked to information about filing for unemployment. The company said it would update the section on health insurance “as soon as reasonably possible.”

News of the closure comes about five months after Dom’s and Foxtrot announced plans to merge under a new entity, Outfox Hospitality, helmed by Foxtrot CEO Liz Williams. Earlier this year, the company named former Whole Foods executive Rob Twyman its new CEO effective March 11. A February news release announcing the leadership change touted plans to expand to new markets.

Foxtrot has 33 stores, with about half in Chicago and the rest spread across D.C., Dallas and Austin. Dom’s, which is also known for its upscale, downsized concept, has two Chicago stores, one in Lincoln Park and one in Old Town. When the Lincoln Park Dom’s opened, management said they aimed to hire 160 employees; the Old Town location was slated to create 180 jobs.

The company announced plans in September to open a third location in River North next summer.

Foxtrot, which was founded by Mike LaVitola as an online delivery-only service, launched a bricks-and-mortar store in Lincoln Park at the end of 2014.

The company would go on to pursue aggressive expansion plans, announcing a few years ago that it aimed to open more than 60 stores by the end of 2022, about double the amount of stores it had before they all shuttered Tuesday.

LaVitola did not immediately respond to a request for comment Tuesday.

Dom’s had also been on a growth trajectory. At the time the Old Town store launched in a former Plum Market space on North Wells Street in 2022, the company had plans to open 15 Chicago-area markets by 2025 and was starting to set its sights on the suburbs.

In December, Dom’s got approval from the Vernon Hills Village Board to open its first suburban location at the outer edge of the Hawthorn Mall redevelopment on Townline Road. The company had planned to start work on the Vernon Hills store in 2025.

Foxtrot stores straddle the line between upscale convenience store and cafe, while Dom’s, launched in 2021 by Chicago grocery scion Bob Mariano and former Dominick’s executives Owen and Fitzgerald, is known for fuller grocery offerings and a wide range of prepared meal options.

A former Dominick’s executive, Mariano started his namesake chain in 2010. Mariano’s grew into a major Chicago player after Safeway shuttered the Dominick’s chain in 2013. In 2015, supermarket giant Kroger bought Mariano’s parent company, Milwaukee-based Roundy’s, for $800 million. Mariano stepped down as CEO of Roundy’s in 2016.

At the time of the Dom’s launch, Mariano told the Tribune the neighborhood market would fill a niche for fresh produce, meats, baked goods and in-store dining not well-served by online delivery or large brick-and-mortar supermarkets.

He declined to comment Tuesday.

When it shut down, Dom’s had already signed leases on both the River North and Vernon Hills properties and was exploring opening locations in other markets, including Texas, Florida, California and Tennessee, according to a source familiar with the company’s expansion plans.

The merger with Foxtrot was designed to give both brands a runway to expand by creating cost-savings synergies. The two Dom’s locations were modestly profitable, while a number of Foxtrot locations were losing money, according to the source.

Running out of money, the combined entity met with bankers, investors and landlords within the past few weeks looking to renegotiate terms and raise new capital, the source said. Those efforts were apparently unsuccessful and the grocery chain decided to close its doors and potentially file for bankruptcy protection, the source said.

As a niche grocery chain, Dom’s Kitchen and Foxtrot were also facing economic headwinds amid ongoing inflation in food prices, according to Noah Rohr, a Chicago-based equity analyst with Morningstar whose portfolio includes the grocery segment.

“In the grocery space right now, we’re seeing a lot of value-oriented, low-price retailers do really well, such as Walmart and Costco,” Rohr said Tuesday. “Foxtrot and Dom’s seem to be a bit more niche, so potentially their target market is kind of small, and the shoppers are just seeing better prices, better opportunities elsewhere.”

Loyal Dom’s customers lamented Tuesday’s abrupt closure. Becca Richter, 25, said she “genuinely sprinted” to Dom’s in Lincoln Park after learning the news. Though she couldn’t enter the store, an employee gave Richter a small box of chocolate chunk cookies, which he said were the very last ones.

“I don’t think I’m gonna eat these, I’m just gonna let these be a memorial,” said Richter, who lives in Lakeview.

Former Dom’s shopper Hannah Foster said she’d stopped by the store yesterday to buy produce, but found they were out.

“It was kind of later in the day, so I assumed maybe today there’d be more,” Foster said. Instead, she found out via Instagram that the store was closed.

Workers slowly trickled in and out of the store throughout the morning, some leaving with bags of groceries or flowers. A small crowd gathered outside. At one point, workers brought a shopping cart full of Dom’s branded mugs to the assembled crowd, some of whom grabbed two apiece.

“Can we order coffee from the window?” one woman asked. “There’s no one there,” an employee responded.