Dean & DeLuca Sinks Further Into Debt

Dean & DeLuca Sinks Further Into Debt

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Dean & DeLuca, the debt-ridden global chain of luxury food shops, has defaulted on federally mandated payments to former employees and stalled payments to current employees in the United States, according to accounts from employees and documents received by The New York Times.

The parent company, Pace Development in Bangkok, did not respond to repeated requests for comment.

In recent weeks, four Dean & DeLuca cafes have closed, including Stage, the company’s expensive new showpiece in Manhattan’s fashionable Meatpacking district; it had been open for just three months. Only four stores are left in the United States, and nearly bare shelves are stocked with supermarket products rather than the delicacies the chain relied on to build its brand. (When Pace bought Dean & DeLuca in 2014, there were more than 40 locations in the United States.) The Wichita Eagle also reported that there were layoffs this week at the company’s American headquarters in Wichita, Kan. And The San Francisco Chronicle reported that laid-off workers from the shuttered store in the Napa Valley, who have not received final payouts, are considering a class-action lawsuit against the company.

However, this week the chain’s Bangkok-based owner, Sorapoj Techakraisri, was touting the chain’s growth in Asia and the Middle East, where the company has about 70 stores, many of them licensed franchises. According to Retail News Asia, he said at a press conference that 90 more stores in Thailand would open in the next five years, and that the brand would be launched in five more Asian capitals. About the American stores, he said, “We are adjusting the Dean & DeLuca business to a more appropriate size by controlling expenditures both at its office and stores.”

Meanwhile, United States vendors of artisanal baguettes, smoked fish, hot sauce, chocolates and more, owed hundreds of thousands of dollars, have cut off the chain’s credit. According to multiple employees, both former and current, landlords served eviction notices at two New York stores that have now closed, citing hundreds of thousands of dollars in unpaid rent. One former employee, who requested anonymity to avoid retaliation by the company, said that the laundry service had stopped delivering clean uniforms, so workers were competing to grab the least-soiled jackets from the previous shift.

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