Retailer that was to supply hats to Foxtrot instead sells them to help market's ex-employees

CHICAGO (CBS) -- Earlier this spring, the grocery store Foxtrot Market ordered 600 baseball caps from local apparel and gift shop Alice & Wonder – only to go out of business abruptly soon afterward.

In an Instagram video, Alice & Wonder owner Ali Reff said Foxtrot first approached her business two years ago – asking them to design a hat for the opening of their Wrigleyville store. Foxtrot also placed merchandise from Alice & Wonder at its stores around the city.

The promotions were a success, so this year, Foxtrot asked Alice & Wonder to design a hat again to promote the launch of Foxtrot's hot dog chips.

Alice & Wonder came up with a navy blue hat with the text "Locals Only" and a picture of a Chicago-style hot dog with all the trimmings – similar to the Chicago hot dog image known to generations of Chicagoans from Vienna Beef iconography.

Alice & Wonder ordered 660 hats, Reff said in the video. But on April 23, they found out Foxtrot Market and Dom's Kitchen & Market were going out of business effective immediately.

Reff said in the Instagram video that Alice & Wonder received an email at 3 p.m. that day reading, "Thanks for being a vendor," with no information about payment.

"The way we look at it, we had the opportunity to turn lemons into lemonade here," Reff said.

A concerned neighbor had set up a GoFundMe for the employees of the Foxtrot store on Southport Avenue in Lakeview – who had all lost their jobs abruptly. Reff said Alice & Wonder has decided to sell the "Locals Only" hats, and donate 100% of the proceeds back to the GoFundMe.

By Thursday evening, the hates were sold out. Alice & Wonder said it would be able to donate more than $10,000 to the GoFundMe.

Alice & Wonder has locations at 3542 N. Southport Ave. in Lakeview, and 956 W. Webster Ave. in Lincoln Park. There is also a Mini Wonder shop with products for babies and toddlers at 3527 N. Southport Ave. – across the street from the main Southport Avenue location.

Foxtrot and Dom's had announced a merger six months before the abrupt closures, under the parent company Outfox Hospitality.

The closures affected both Dom's locations in Chicago, and all 33 Foxtrot stores in Chicago, Texas, and the Washington D.C. area.

Delivery was halted, mobile apps went dark, and store credit cards were cut off. All Foxtrot and Dom's account credits and member perks were voided, effective the day the stores shut down.

Some employees said they found out the stores had closed upon coming to work on Tuesday, April 23. Two young women working at a Foxtrot at Broadway and Diversey Parkway posted a TikTok video saying they found out the company was shutting down and they were losing their jobs in the middle of their shift.

They said customers were still inside at the time and were all asked to leave, and the store promptly went out of business — with a handwritten sign reading, "Closed for good."

CBS 2 also learned that Foxtrot did not tell the State of Illinois it was shutting down until the day after it happened. The Illinois Worker Adjustment and Retraining Notification (WARN) Act requires employers to notify workers of mass layoffs 60 days in advance.

Combined, nearly 350 people who had worked at Foxtrot and Dom's lost their jobs in Illinois, with hundreds more also losing their jobs at Foxtrot locations across the country.

A federal lawsuit filed after the closure seeks class-action status for all Dom's and Foxtrot employees and demands 60 days of severance pay and benefits for laid-off workers.

This week, Foxtrot and Dom's filed for Chapter 7 bankruptcy, according to documents filed in Delaware bankruptcy court. 

Under the Chapter 7 bankruptcy filing, the parent company Outfox Hospitality reported its estimated number of creditors between 5,000 and 10,000. The filing listed the company's estimated assets between $10 million and $50 million and reported estimated liabilities in the same range. 

Under such a filing, a company closes and sells off assets to pay creditors, compared with Chapter 11, which allows a company to reorganize while devising a plan to pay off its debts.