What: Neighborhod Goods closes its two Texas-based stores.

Why it is important: These are the two original stores. The remaining ones are in NY and California.

Neighborhood Goods, a Dallas-based retailer designed to bring digital brands into physical stores, has closed its Plano and Austin locations. This company, which aimed to provide a physical presence for online brands without the need for significant investment in standalone stores, still operates two other stores in New York City's Chelsea Market and Newport, California's Fashion Island.

The Plano store, a 14,000-square-foot space in the $3 billion Legacy West mixed-use development, opened in 2018 and closed on December 31. The Austin store launched in March 2020, coinciding with the start of the pandemic, and closed on January 2. CEO Matt Alexander, who co-founded Neighborhood Goods with Mark Masinter, stated that these closures were pre-arranged due to different reasons and clarified that the company is not planning bankruptcy but is exploring various paths forward.

Neighborhood Goods, founded in 2018, gained attention by offering a rotating collection of online brands such as Rothy’s, Dollar Shave Club, and Draper James in a department store format. By 2019, the company had raised $25.5 million for expansion but paused its plans to open two to three stores annually due to the pandemic.

The company, supported by investors like Global Founders Capital and Forerunner Ventures, positioned itself as a modern alternative to traditional department stores. It aimed to cater to customers who prefer to experience products physically before purchasing online. The store design by Droese Raney Architecture featured modular components to flexibly showcase various brands.

As the retail landscape evolved, larger retailers like Target and Macy’s began incorporating digital brands into their offerings. Meanwhile, many digital-first brands, including Rothy’s and Buck Mason, have opened their own physical stores, while others experimented with temporary pop-ups. Shopping centers responded to the shift in retail trends by offering shorter-term leases and temporary spaces, particularly during the pandemic-induced wave of store closures.

Neighborhood Goods closes 2 of its 4 locations