Thailand’s Pace Corporation, the firm responsible for bankrupting its gourmet grocery business Dean & Deluca earlier this year, has bid US$10 million to buy back the firm.
The firm has offered to use half of the investment as a gesture towards creditors, owed $26.5 million by the failed business, which would represent a payout of less than 20 cents in the dollar.
“Dean & Deluca overexpanded and lost what made them special,” debt expert Adam Stein Sapir told The New York Post. “But if they can bring it back to its former glory with a smaller footprint, it has a lot of potential.”
The firm’s financial distress dates back well before the advent of the Covid-19 pandemic, with a history of legal filings against Dean & Deluca for nonpayment of bills going back to 2018 after Pace had spent $240 million on expansion. Its self-owned US retail stores and online shopping portal have been closed since the middle of last year.
The original Dean & Deluca US store opened in Soho in 1977, earning the nickname “museum of fine food”. It claimed to be the first retailer in the US to sell radicchio, balsamic vinegar and sun-dried tomatoes. But over time its exclusivity waned – as one food writer observed: “You can buy extra virgin olive oil on Amazon now”.
The brand’s value has shrunk from $55 million to $12 million since the closures of the majority of its outlets.
Meanwhile, Dean & Deluca continues to expand across Asia via its separate Asian entity and partnerships with franchises and JV partners, although a recent foray into airport stores has been hit by the Covid-19 pandemic.