The Thai owner of the gourmet grocery and café brand Dean & DeLuca plans to issue $60m of long-term debt in a bid to revive the US fortunes of a chain that was a pioneer in selling pricey curated cheeses, olive oils, and cakes.
Sorapoj Techakraisri, chief executive of parent company Pace Development, told the Financial Times it had no plans to sell Dean & DeLuca, which it acquired in 2014 but has since been laid low by high costs and online competition.
He said Pace would use proceeds from the sale of the debentures to
pay back some of the money owed to banks, artisanal patissiers and other suppliers left with unpaid bills because of a cash crunch at the Bangkok-based property group.
“The first priority in the US is to bring in new money to pay off those creditors that we owe money to and then slowly start rebuilding the brand,” Mr. Sorapoj said ahead of his first trip to the US since Dean & DeLuca’s crisis deepened over the summer.
Dean & DeLuca has already closed most of its stores in the US and faces lawsuits from angry suppliers. The US chain’s mounting losses mark a rare high-profile failure of an overseas acquisition
for Thailand, whose Sino-Thai family conglomerates are big investors abroad, but typically attract little publicity. Pace reported a second-quarter net loss of Bt726m ($24m).
“Our plan now is to raise money at the Pace level, and also to continue with two real-estate projects that we have,” Mr. Sorapoj said, adding that because of its losses in the US, Pace had frozen work on nearly completed high-rise condominium developments in Bangkok and Hua Hin.
“More money will come out at completion, and hopefully by then the US is more stable, and we can start thinking about growing again,” Mr. Sorapoj said.
