Death of Fox & Obel

photo (63)I’ve written many “Death of” articles – death of Blackberry, death of the penny, death of the Encyclopedia Britannica. But this one really hurts…

Before Mariano’s Fresh Market, Whole Foods, Wild Oats, and Trader Joe’s (I’m still mad at them for not giving me an opportunity to interview after I submitted an application at a different point in my life out West, but that’s a story for another time), there was Fox & Obel, the Chicago-based, River East mainstay for over a decade. With rumored celebrity investors like Scottie Pippen, 5 dollar per ounce olive oil, truffle tasting stations, in-house wet and dry aged meats (initially the only grocer that carried Tall Grass Beef from Red Buffalo Ranch, owned by Bill Curtis), top-notch wine and apéritif lists, hard-to-find regional and international accoutrements, and a Zagat-rated cafe attached, people had flocked to what is arguably the first high-end grocery store in Chicagoland. And this was despite its sky-high prices (trust me, much worse than Whole Paycheck, I meant Whole Foods).

Manning the bakery was Phyllis, a lovely woman and native of South Africa who never hesitated to scold rude customers, who took it. There was Martha, the ever-smiling assistant manager greeting patrons as they walked in and out. And Juanita, café manager and a single mother (her son’s a star athlete at a local Catholic school). Juanita knew exactly how you liked your coffee. Fox & Obel managed the unlikely balance of Chicago Gold Coast uppity-up-ness with a neighborhood feel. My business partner (of Spend Matters fame) Jason Busch Ioved the bakery so much that its muffins, pastries and bread made it into our formal LLC operating agreement for our Spend Matters advisory business (i.e., written into the agreement was that one partner had to “stop at the Fox and Obel” bakery before business meetings – I kid you not, and yes we did honor the agreement!) Unfortunately, it’s now time to amend it.

For a while we’d heard rumors of additional investors, new stores in the downtown area, North American expansion. Then bam: the bottom fell out.

My wife Jenna and I walked around the closing sales event with heavy hearts. To Jenna and me, this was not just a grocery store – Tsige cooked for us, Sue babysat our kids, and on Friday afternoons I used to bring my RJSL and Spend Matters colleagues treats from the Fox & Obel bakery. So what happened? I can certainly make a few hypotheses.

  • Decreasing passion and sense of mission – After initial success, the original founders cashed out to private equity investors. And I could sense a gradual decline in quality over the past few years. Does that mean every buyout spells doom for those acquired? No, but it does mean that if cash flow buyers (as opposed to strategic acquirers) focus too much on the short-term bottom line, it will erode the X-factor that made the establishment special.
  • Hiccups in execution – It could be as minor as less crust on what used to be their signature almond croissant (Jenna noticed it after a new pastry chef came on board; the long-time head quit when his paycheck bounced), as major as multiple health code violations (fruit flies in food preparation stations is what I’ve heard), and everything in between, such as failure to pay electricity bills on time.
  • Poor inventory – Along with declining quality, I noticed that shelves were becoming emptier. No longer was Fox & Obel the go-to place for hard-to-find items, and even its staple trappings were sometimes missing, a cardinal sin for a grocery store. I am not a grocery industry expert by any stretch of the imagination, but even I could see tension between Fox & Obel and its suppliers.
  • Erosion of the foundation – No disrespect to technology and process (many economists claim these are the only two factors that could push the famed EFPC – efficient frontier production curve – outward), but people make up every business’s foundation, regardless of the segment. Again, towards the end, I heard grumblings from Fox & Obel’s employees. Perhaps they trusted me since I was a regular, but nonetheless, I never heard any complaints over the first few years.

I could go on and on, but it won’t bring Fox & Obel back. Furthermore, I think these causes of their failure are a good lesson for just about any business. And in case you were wondering what Jenna and I bought at the final closing sale, we stocked up on Fox & Obel water glasses and Mexican Coca Cola, made with real sugar. Coincidently, the sourcing of Mexican coke is a great personal procurement lesson – which involves having to pay significantly more for a far superior product (which also requires seeking out) albeit with the same corporate brand.

I promise to tackle more cheerful topics for the rest of 2014. Happy New Year, everyone.

We’ll also let you know what new Chicago bakery (La Fournette is highest on our current list) that Jason and I decided to amend and include in our operating agreement so that the entire Spend Matters and MetalMiner office continue to remain well-fed and sugared-up.

Requiem / Paean for a Dot-Com Darling

It’s a tale that unfolds more than we care to count, but is heart-wrenching to see nonetheless.  We’ve seen it many times: a young star meets with great success early on.  Their ascent is met with many accolades and kudos.  Then, they fall from grace.  Scandal; missteps; a change in public sentiment.  No matter how hard they try, they can’t reverse their fall from the great heights.

Sock puppets and search engines

yahoo pets.comI’m talking, of course, about Yahoo!, the once-revered icon of the late 1990′s dot-com era.  Two young Stanford grad students, Jerry Yang and David Filo, unleashed on the world an indexing service that would help navigate journeys on the increasingly congested “information superhighway.”  In this context, Yahoo! was nothing short of revolutionary.  Even its silly name seemed to capture the slightly irrational, but very fun, mood of the time.  This was when “burn rate” was a proxy for a company’s growth prospects, Herman Miller chairs and foosball tables represented credibility, and Jack Welch could get upstaged by a sock puppet as a company spokesman.

I have fond memories of that era: it’s when I moved to Chicago, fell in love with the woman with whom I just celebrated 11 years of marriage, and arrived at the very satisfying answer to the Frequently Asked Question, “what the hell are you going to do with a History and French degree?”  It’s why I still have a great deal of affection for this Sunnyvale company, even after the Microsoft acquisition debacle, the dustup over Carol Bartz ignominious departure, and the Scott Thompson resume kerfuffle.

Having logged time at two financial services companies, I was obviously a big fan of Yahoo! Finance.  There were two services, however, that capture the era well.

Yahoo! MailWashington University alums will recall standing in line waiting for the sterile “green screen” terminals to check their “Pinemail” in the Olin Library.  I quickly tired of the clunky interface I used to check my email after leaving St. Louis, and abandoned my “@wustl.edu” account for a Yahoo! one.  Granted, I am on the whole underwhelmed by Yahoo! Mail, given their glacial pace of introducing upgrades, and the fact that their integration with Outlook is a joke.   However, my Inbox is an ever-evolving scrapbook, a digital collection of moments I’ve shared with friends, family, and professional connections.  It’s why even though I have a Gmail account I’m still not parting with my Yahoo! account.

Geocities.  Facebook, Twitter, YouTube, and Instagram have found a captive audience in folks looking for exposure – sometimes a little too much, as in the case of the “oversharenting” moms and dads examined in The Wall Street Journal.  It wasn’t always this easy.  I hate pulling out the “in my day” card, but you had to sort of know what you were doing in the late 90′s to publish content.  Geocities was the middle ground between Facebook and WordPress, that offered some primitive drag and drop tools for building and maintaining Websites.  Through Geocities I was able to share pictures with relatives in India, develop a Web portfolio to show hiring managers that a liberal arts grad could write code, and acquire a minor following from folks interested in sound clips from Goodfellas (one of my all-time favorite flicks).   Geocities has unfortunately gone the way of Delicious, Briefcase, and other sunsetted properties.

Holding out for a Hero (or a Good Product)

Ashton Kutcher was recently tapped to play Steve Jobs in an upcoming biopic.  At time of writing, if we were to associate a celebrity with Yahoo!, it would unfortunately be the likes of Lindsay Lohan or some other misstep-prone, washed up train wreck.  I’m holding out hope though.  Few seem to recall that the Apple of today was very much like Yahoo! before Jobs rescued it from the brink in the late 90′s – incidentally, while Yahoo! was riding high.  To win over the hearts and minds of customers and investors, Yahoo! needs to completely reinvent itself like Jobs did with the iPod, as opposed to half-baked, poorly executed attempts at innovation such as Livestand, and now Axis.

I’d like the next chapter of  the Yahoo! story to unfold like the amazing scene in Limitless when Eddie Mora shakes off the cobwebs, gets to work, and starts kicking some serious butt.  It would be nice for Yahoo! to replace “LiLo” with Bradley Cooper as the star with whom they are identified.  As talented as he is, however, I’m not sure Cooper could pull off the Jerry Yang look.  There’s always Eddie Murphy.

Related Articles

America – Land of the Non-Political Economy

It’s refreshing to be reminded about how little politics matter in our economy. How do we reflect on this? By looking at how influential they are in other countries. The latest example is in view at our biggest “competitor”, China. In a current NY Times report we see how political the economy really is. The Chinese (mainland, not Taiwan) economy has no free distribution mechanisms, there is not process nor established procedure for distributing opportunities, or rather they must be greased by and for the benefit of the oligarchy. In contrast, in America we have today (5/18/2012) a view of Facebook as it goes public. This company was invented by a few guys, funded by a bunch of endorsers over the years, and finally built into a web powerhouse, all without any political intervention, rather by a raw effort to build stickiness.

All this is to say, as we hear partisan bellyaching about the economic policies of one side or the other, remember that as much as the President and Congress can do structurally to set the rules, in the day to day they do very little vis a vis the economy. They by and large do not manage opportunities; they do not have any real control of gas prices, the labor market, or any other facet of activity. For that matter neither do our business moguls. If they had their way natural gas (ergo our heating bills) would be priced much higher today.

Related Articles

Follow

Get every new post delivered to your Inbox.

Join 53 other followers

%d bloggers like this: