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Neighborhood Goods on Friday will open its third store, a 10,000-square-foot unit on South Congress in Austin Tex., in a new mixed-use development, Music Lane, where other tenants will include Texas’ first SoHo House, the city’s first Equinox, as well as AllbirdsLululemon, Le Labo and Reformation.

The store’s opening was timed to coincide with SXSW, which last week was canceled when Austin Mayor Steve Adler declared a local disaster due to concerns over the coronavirus. Matt Alexander, cofounder and chief executive officer of Neighborhood Goods, expressed disappointment but was pragmatic about the decision.

“The cancellation of SXSW has been a blow for the city as a whole,” he told WWD. “For us, it was certainly an aspect of our plans as we pushed to launch alongside the festival, but it wasn’t everything. This is a long-term lease and we’re excited to be in Austin for the long haul, not just SXSW. We remain excited about opening on March 13 with 50 unique and fantastic brands and hosting many — but not all — of our planned events, and we’re looking forward to supporting the broader Austin community.”

Alexander said the concept is showing resilience, with Neighborhood Goods logging 500 percent revenue growth year-over-year in retail sales in the opening months of 2020, driven by the successful launch of the Chelsea Market store in Manhattan, and the significant ongoing performance of the Legacy West unit in Plano, Tex.

The Austin store, which is a hybrid of the first two locations, is the beneficiary of 18 months of testing and learning. The original 14,000-square-foot Plano location has ample space to showcase individual brands such as Fossil, Hill City, Kate Spade, Faherty and Upwest, while the 4,500-square-foot Chelsea Market store’s tighter footprint and higher density of brands and products necessitates that brands are almost entirely blended.

Alexander said the Austin location will have more space dedicated to specific brands, but there will also be areas with blended products that promote discovery.

The flexible retail concept has helped Neighborhood Goods grow its partnerships and accelerate its expansion plans. “It’s really exciting to see how each location can serve a different purpose,” Alexander said. “The Chelsea store is drastically different from the Plano store. Chelsea gets a crazy amount of traffic.

“We imagined what a retail concept would look like with a lower barrier to entry for direct-to-consumer brands,” said Alexander, adding that spaces and financial arrangements are different for every brand. “The length of a brand’s tenure varies. We’re offering them a really easy way to come in with a more integrated blended area.”

Alexander said the retailer in 2019 worked with 104 brands, ending the year with 90 of them still active. “We built the model around short-term relationships and they ended up being more loyal than we expected. Now we’re starting to bring on bigger brands that are more associated with a lifestyle than a direct-to-consumer model.”

Aesop, the Melbourne, Australia-based maker of plant-based skin-care, hair and body products, is an example. “Aesop will have its own moment within beauty,” Alexander said. “Illesteva, Italian-made sunglasses, will have a moment. We’re introducing a kids’ section where Rockets of Awesome will have its own distinct space.”

Other labels earmarked for Austin include Baboon to the Moon, Tribe Alive, Cancelled Plans, Mack Weldon, Skagen, Kuhn Jewelry, Dollar Shave Club, Modern Citizen and Taschen.

Alexander said consumers can expect collaborations, location-based exclusives, and a burgeoning private label collection of T-shirts, caps and tote bags, launched as a way to build loyalty for Neighborhood Goods.

Food is an important part of the Neighborhood Goods experience. The Austin store will feature a branch of the retailer’s Prim and Proper restaurant with more vegan and plant-based options on the menu, in deference to the community, along with classic  burgers, sandwiches and salads.

Neighborhood Goods plans to continue to expand. Alexander said a Series A funding round that closed in September with $11 million raised has since grown to $13 million. “There’s a few more stores in the pipeline in a lot of different locations,” Alexander said. “We’re definitely looking at the West Coast. New York could handle another store. That’s certainly something we’re thinking about.”

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