Chicago-based Foxtrot, a label-defying hybrid of urban convenience store, local market and cafe, said it has raised $100 million in a Series C funding round led by D1 Capital Partners. This latest investment round brings the retailer's total funding to $160 million, which the company said it will use primarily for expansion, hiring and technology.
Founded by Mike LaVitola and Taylor Bloom in 2014, Foxtrot calls itself "the convenience store of the future" and aims to "modernize the nostalgic corner-store experience" with user-friendly online ordering and both local and nationwide delivery, plus a discovery-centered store offering that highlights regional and small suppliers.
The retailer said it will use this fresh influx of capital to open 25 new stores in 2022, which will include entrance in Boston’s Back Bay neighborhood, the brand’s debut in Austin, Texas, with two stores, on South First and The Drag, and openings in Chicago’s Willis Tower, Tribune Tower and near Wrigley Field. In 2023 and beyond, Foxtrot will continue expansion to additional markets such as New York, Nashville and Miami, while also expanding its presence in current markets.
Foxtrot also will focus on scaling its merchandising model, which combines products from local artisans with core pantry essentials, favorite treats and hand-picked wines, spirits and local beers, it said. Driven by customer demand, Foxtrot is also investing in a deeper private-label assortment around mealtimes, expanding on its core offerings of coffee, ready-to-eat cafe meals and wine, all optimized for both delivery and pickup.
The company also said it will prioritize hiring engineering talent, with a plan to triple the team’s size over the next 12 months, bringing on people to optimize logistics, store payments, inventory management, personalization and Perks, Foxtrot’s loyalty program.
“As we exit the pandemic and our lives continue to normalize following a challenging and eye-opening two years, we expect that retail and hospitality will become increasingly important in creating a sense of community and driving discovery in a world that’s been lacking this experience for quite some time,” said LaVitola, Foxtrot's CEO. “With this new round of funding, we’ll continue to accelerate the expansion of our brick-and-mortar presence, enter new and emerging markets and double down on new store formats that answer consumer demand for immersive programming and highly curated assortment. Our investments in technology will enhance our retail experience and drive omnichannel growth.”
Foxtrot’s operating model uses retail stores as delivery hubs. It will invest in logistics technology to power 30-minute delivery while optimizing store and user-experience (UX) design for five-minute in-store pickup, which has grown 250% this year, the company said, with cafe orders within the channel increasing at an even faster at approximately 375% year to date.
“Foxtrot’s track record for creating neighborhood spaces that drive repeat visits and habitual purchase has made it a clear leader in trend prediction and understanding what the future of retail will look like,” said Jared Stein, co-founder of Monogram Capital and Foxtrot board member. “As Foxtrot expands its omnichannel footprint, the potential for scale on a national level is limitless as the brand looks to reimagine what convenience means to today’s consumer.”
The brand’s highly curated merchandising strategy promotes a sense of discovery and local community, said the company. While it will continue to curate new, trending food products, it will also allocate nearly a quarter of all shelf space to locally sourced items from neighborhood artisans and to emerging purveyors, it said.
Using customer data, Foxtrot has identified a “white space” in consumer packaged goods (CPG) retail: private-label products “rooted in deliciousness and design.” Since introducing private-label products a year ago, the chain’s assortment of Foxtrot-branded and -created labels now accounts for nearly 30% of its retail offerings, and nearly half of all brick-and-mortar and online sales. Over the next year, Foxtrot plans to create and launch approximately 200 new private-label SKUS “that will underscore the brand’s key category differentiator of brand creation and voice, expanding on the current favorite product lines and entertaining completely new categories,” it said. Foxtrot’s private-label products will continue to serve as a complementary offering to the brand’s “lifeblood” of emerging brand partners and local purveyors, the company said.
A version of this story originally appeared on CSPDailyNews.com.