Retailers have stocked their shelves with the spookiest products this season. But some companies have become the subject of stories that could even make Freddy Krueger and Pennywise jump.
Retail has had its fair share of incidents and missteps that many would like to forget. Macy’s announced plans to shutter 150 stores over the next three years. Rue 21 took its third lap through bankruptcy court. And, more recently, Bath & Body Works came under fire for a problematic candle design.
While there’s still time for retailers to have cringe-worthy moments this year, here’s a look back at some of the industry’s biggest horror stories of 2024.
1. Foxtrot’s abrupt shuttering, bankruptcy filing
At the start of 2023, upscale convenience store chain Foxtrot was expanding. The retailer had just opened its sixth location in the Washington, D.C. area, bringing its total store count to just under 25. By June, Foxtrot had opened its largest store to date, located in Austin, Texas.
In the fall of 2023, the company announced plans to merge with Dom’s Kitchen & Market, in a deal expected to close in the fourth quarter of that year.
By this April both companies abruptly ceased operations, closing all of Foxtrot’s 30-plus locations and two Dom’s stores. About three weeks after that, Outfox Hospitality — parent company of Foxtrot Market and Dom’s Kitchen & Market — filed for Chapter 7 bankruptcy protection. At the time of the filing, Foxtrot’s inventory, intellectual property, accounts and other assets were already sold for $2.2 million in a foreclosure sale.
In June, Foxtrot confirmed plans to reopen several locations in Chicago, Dallas and Austin in the summer in an initiative led by founder Mike LaVitola.
“Obviously it’s been a really challenging couple of months here. The closures of the stores were super sudden and super unexpected, including to me,” LaVitola said in an interview with sister publication C-Store Dive shortly after reopening plans were announced.
Foxtrot in early September reopened its store in Chicago’s Gold Coast neighborhood — the first in what’s expected to be 15 store reopenings through next year. Since then, the retailer has reopened two additional stores in the Chicago area as well as relaunched its delivery and order-ahead services.
2. Youthforia’s foundation shade
When Youthforia introduced its Date Night Skin Tint Serum Foundation in 2023, it was met with criticism for its limited shade range. The original offering featured 15 shades, with few coming in shades designed for darker skin tones.
Earlier this year, the beauty brand added 10 shades to its foundation. However, the brand’s darkest shade, 600, drew a wave of backlash.
Golloria George — a social media influencer who reviews whether various beauty products offer inclusive shade ranges — compared the shade 600 to black face paint.
“Who is this color,” George said in the TikTok video posted in April. Comparing the two darkest shades in the range, George said, “There could be, like, 10 more shades in between these two shades.”
On June 3, Youthforia posted to its Instagram account a statement about its “commitment to providing inclusive products,” which included creating “a new position internally dedicated to examining both our current products and those in development so we can best meet your needs.”
The brand at the time also announced that it decided to stop selling shade 600 and was working with retailers to remove it from store shelves and online.
“When we extended our foundation shade range, we never intended to upset our customers or community and we sincerely apologize,” the brand said. “We remain committed to listening to our community and providing inclusive products.”
Almost four months after the shade was pulled, the brand posted a video of founder and CEO Fiona Co Chan addressing what it describes as “missteps.”
“What happened was, I wanted to rush the process to create this shade extension,” Chan said. “There was just a series of missteps, both on our process as well as how fast I was making our labs work, where it just kind of snowballed into just this huge mistake. I want to be clear, there was never any ill intent when we were creating any of the shades, but a few things did slip through the cracks, and for that, I am genuinely, genuinely sorry.”
3. Lululemon’s Breezethrough leggings
In the first quarter, Lululemon CEO Calvin McDonald said the company missed opportunities in its women’s business, including offering too narrow of a color palette on leggings and experiencing out-of-stocks in its smaller sizes.
However, the executive on an earnings call at the time touted “upcoming product launches and innovation,” including a new legging innovation dubbed Breezethrough, which was set to debut in July.
Consumers were quick to criticize the design, saying they were too thin and unflattering, and the athletics retailer pulled the product.
On its second quarter earnings call in August, McDonald addressed missteps in Breezethrough’s design.
“We view this as a test and learn,” McDonald said. “And while guests were excited by the fabric, the design didn't meet their expectations. Listening to our guests is central to who we are and how we grow our brand. And we took the right step of pausing on sales and look forward to reintroducing the fabric in the future. This decision had a negligible impact on our performance in this quarter.”
Lululemon has faced criticism surrounding its products before. In 2013, recalled some of its black pants for being see-through.
Wedbush analysts in August noted that “while we don’t think the impact will be as pronounced this time around (brand is more diversified than in 2013, has more brand equity/loyalty now, not as embarrassing a problem for customers as having pants be see-through, etc.), we think it’s prudent to reduce our sales/EPS forecasts meaningfully due to this issue.”
4. Nike’s DTC pivot
Nike was among a group of traditional retailers — that also included Adidas, Under Armour and Levi’s — in placing greater emphasis on their DTC businesses.
Nike’s DTC business in 2010 made up just 15% of its total revenue. But a decade later, the athletics retailer grew its direct business to make up 35% of its revenue, in part by moving away from wholesale partners.
Nike pulled back on its partnerships with retailers like DSW, Macy’s, Urban Outfitters and Foot Locker. However, the athletics retailer eventually ended up returning to many of those retailers and said it found value in both its DTC and wholesale channels.
Then-CEO John Donahoe addressed flaws in its DTC strategy on the company’s third quarter earnings call in March. “We know Nike is not performing at our potential,” Donahoe said. “While our consumer direct acceleration strategy has driven growth and direct connections with consumers, it’s been clear that we need to make some important adjustments.”
Since then, Nike’s DTC pivot has become the subject of a lawsuit that specifically named Donahoe and CFO Matt Friend. The suit alleges that the company misled investors about how successful its Consumer Direct strategy was and how it was “unable to generate sustainable revenue growth.”
Now, the athletics giant is working to correct its DTC pivot with new leadership at the helm. In September, Nike announced Donahoe would be exiting the company, with longtime Nike veteran Elliott Hill replacing him as CEO. Hill, who retired in 2020, was previously the retailer’s president of consumer and marketplace.
5. Outdoor Voices’ store closings
In its prime, Outdoor Voices was widely considered one of DTC’s darlings. The brand, founded by Ty Haney, became popular for its activewear and “Doing Things” ethos.
Things began to take a turn, however, with Haney abruptly exiting the company in early 2020. A few months later, Outdoor Voices ushered in a new chairperson, Ashley Merrill, who founded DTC sleepwear brand Lunya. A focus for the company under Merrill’s leadership was profitability, something that was previously questioned by observers.
In the spring of this year, Outdoor Voices suddenly shuttered its stores, notifying its store employees just days before. Those stores — in major cities across the U.S., including Boston, Chicago and Wahsington, D.C. — ran 50% off sales to clear through inventory. Severance was not offered, according to employees at the time. Employees also said they were told that just 10 employees would remain at the company after the stores shuttered, with 80% of its headquarters staff, including the director of retail, being laid off.
Less than three months later, Outdoor Voices announced it was being acquired by Consortium Brand Partners, the owner of Draper James. The brand’s new owners outlined ambitious goals that included expanding internationally, growing its wholesale business, entering new product categories and re-entering physical retail as early as next year.
“Right now, we really want to focus on ensuring that we have the right product and that we have the right messaging and that we’re talking to the customer again. Because I think for a while that conversation got a little bit quiet for a brand that’s known for its outdoor voice,” Consortium Brand Partners’ co-founder and managing partner Cory Baker said in June.
