Upscale grocery store and café chain Dean & DeLuca has now emerged from bankruptcy. The company filed for Chapter 11 bankruptcy last March, its Chapter 11 plan was confirmed by the Bankruptcy Court in the Southern District of New York this past November, and the plan went into effect on Jan. 28.
The reorganized Dean & DeLuca has emerged with a stronger balance sheet, having eliminated more than $300 million in debt. Owned by Thailand's Pace Development Corp., the Wichita, Kansas-based company shuttered its stores in 2019, but is now working to restart operations in the United States and globally.
Joseph Baum, partner in charge of restructuring at financial consulting firm CFGI, a portfolio company of The Carlyle Group, and Lawton Bloom, of Argus Management, were co-CROs, while Brown Rudnick LLP acted as reorganization counsel.
As for what went wrong with the business, a 2019 Eater article by Brenna Houck noted: “The things that defined Dean & DeLuca as an iconic brand — [a] reputation for high-quality products with a price tag that said “special occasion” — may also have led to its downfall. At one time, the company’s model of premium pricing for premium products like $19-per-pound organic mesclun and $42 boxes of green tea truffles helped it stand out. These hard-to-find items made Dean & DeLuca formidable competition in the 1990s when customers felt confident that they were getting their money’s worth while shopping there. But then imitators like Whole Foods and Eataly began selling similar items for less. Imported ingredients and items like quinoa and fancy cheeses also became more commonplace. And like any other brick-and-mortar storefront, Dean & DeLuca has faced increased competition from online marketplaces like Amazon that provide more convenient ways to find niche items.”