Dean & DeLuca, a pioneer fine-foods retailer in New York City for decades, has filed for Chapter 11 bankruptcy protection.
The coronavirus pandemic pushed the 43-year-old grocer over the edge, according to court documents, but it hopes to sell its brand name — known for such luxury items as $165 tins of Siberian caviar — for $50 million.
The company’s only source of income for the past six months has been royalty fees from a handful of franchised stores that paid the company $1.5 million in 2019, according to the filing.
“It is unclear whether the debtors will continue to receive license payments in the near future due to the effect of the COVID-19 pandemic,” the filing states.
Joel Dean and Giorgio DeLuca opened the first store in Manhattan’s Soho neighborhood in 1977.
But in recent years, it changed hands several times — most recently bought in 2014 for $140 million by Thailand-based real estate company Pace Development — and the chain has struggled against lower-priced competitors.
There were 42 stores worldwide when Pace bought the chain.
By mid-2019, Dean & DeLuca had run out of cash and Pace was not able to offer additional loans to fund continuing losses. The company shuttered all of its owned retail outlets and closed off its e-commerce website.
The company’s assets don’t come close to covering Dean & DeLuca’s massive debts.
The company has accumulated $100 million in operating losses and owes $700,000 to vendors. The grocer owes approximately $275 million to its lenders, landlords, vendors and other creditors, according to the filing.
Dean & DeLuca has one remaining employee — based in New York City, according to court documents.