Neighborhood Goods Stores To Close Permanently

Neighborhood Goods, a retailer attempting to create a new type of department store for direct-to-consumer brands, has informed vendors that it will be closing this month.

In an email sent to them last Friday, the company stated it’s working to finalize “outstanding finances” in January and won’t be invoicing brands for the month. Neighborhood Goods’ closure follows Showfields, another retail stage for DTC brands, shuttering its locations. Both retailers relied predominantly on consignment and charging brands they carried monthly fees rather than operating on a traditional wholesale model. 

Addressing the closure in the email to vendors, which is signed by Matt Alexander, CEO and co-founder of Neighhorbood Goods, the retailer wrote, “We’ve faced a great many challenges over the past few years, but the past 18-24 months have been particularly difficult. (For us and many others.) In confronting those challenges, we came tantalizingly close to making it through. But, in recent days, there has been a cascade of unfortunate events that have undermined our planning and left our path forward looking doubtful.”

“We’ve faced a great many challenges over the past few years, but the past 18-24 months have been particularly difficult.”

Beauty Independent first reported on Neighborhood Goods’ struggles in November, when several brands revealed the retailer owed them money and had stopped responding to their messages. At the time, Alexander told Beauty Independent that Neighborhood Goods was “growing and pursuing a path to profitability through expansion. But, to cut a long story short, those efforts have been hamstrung somewhat.”

Asked in November whether the company will be filing for bankruptcy, Alexander responded, “From this position, the objective is to run profitably and within our own means, rather than relying on support to come from elsewhere. It’s early days, so we’ll see how it plays out.”

Neighborhood Goods opened in 2017 with a location in Plano, Tex. It subsequently expanded to locations in Austin, New York City and Newport Beach, Calif. Neighborhood Goods sold a wide array of goods, from apparel and accessory brands like Thousand Fell to housewares brands like Molekule. It had a robust selection of beauty and wellness products. Crown Affair, Dame, Sunbaked SPF, Loops, Hilma, R+Co, Maude and Boy Smells are among a few of the beauty and wellness brands that were stocked by Neighborhood Goods. 

The company raised $25.5 million in funding from investors, including Global Founders Capital, Forerunner Ventures, Serena Ventures and Michael Dubin, founder and former CEO of Dollar Shave Club. Showfields and Neighborhood Goods are only the most recent once-buzzy retailers that have shuttered their doors in the past year. Standard Dose, Shen Beauty and Inside Outer Beauty have closed along with a number of online-only beauty retailers and subscription boxes. 

Although retailers’ reasons for closures vary, several of them stumbled in the face of a funding landscape characterized by investors’ hesitancy to float companies that don’t have obvious paths to profitability, emerging brands that have embraced an omnichannel distribution approach spreading their retail energies, consumer caution and elevated advertising costs compared to what they encountered at their starts. With the ground shifting under their businesses, they haven’t been able to adjust quickly enough to prop up their companies while simultaneously pinning down a concept that will resonate over the long term.