Retail

Dean & DeLuca Closes Stores Due To Increasing Competition

Dean & DeLuca Closes Stores Due To Competition

Gourmet grocer Dean & DeLuca continues to struggle due to increasing competition.

After more than four decades in business, the grocer is dealing with bare shelves and lawsuits over unpaid bills. It has also closed a number of U.S. locations, with only four stores currently in operation in the United States.

Dean & DeLuca has built its business by offering customers a variety of upscale gourmets that couldn’t be found anywhere else, which enabled it to sell its products at a premium. However, those items are now readily available at chains such as Trader Joe’s, Whole Foods and its online parent, Amazon.

“Carrying around their cup was a status symbol,” food writer and restaurant critic Joshua David Stein said in an interview with Bloomberg. “They were the first store in New York to offer extra virgin olive oil. Now Amazon has extra virgin olive oil. Everyone has extra virgin olive oil.”

Dean & DeLuca’s owner, Bangkok-based Pace Development Corp., revealed that its struggles have caused a delay in payments to some suppliers. Food and beverage sales attributed to the company fell 23 percent to $15.8 million in the first quarter, according to company filings, which also mentioned a debt abatement.

“The lack of financial resources make it very difficult for us to maintain the necessary investments to improve and keep our franchise competitive and attractive,’’ said Sorapoj Techakraisri, Pace’s chief executive officer.

The company is doing well outside the U.S., with 70 stores in Asia. “The U.S. has a very tough environment, but it doesn’t mean we will stop expansion in other regions.’’

Pace acquired the grocer for $140 million in 2014, and Dean & DeLuca compromises more than 60 percent of revenue for Pace.

Among the suppliers that have taken the company to court include Agri Exotic Trading Inc., which sought payment for $173,376 in produce and other goods delivered between February and June. In addition, Four Seasons Produce sued to get $153,504 for goods it provided. Both of those claims were settled earlier this month.

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