BANGKOK -- Thailand's Pace Development, owner of upscale grocery and cafe chain Dean & DeLuca, said Monday it had missed a 2.6 billion baht ($88 million) debt payment owed to the kingdom's second largest bank, Siam Commercial Bank.
The company failed to meet the debt payment date of Oct. 17 and now has until Nov. 4 to pay it. That debt equals to 13% of the company's total assets as of the end of June.
The Stock Exchange of Thailand said Monday that Pace Development had suspended property construction. It also said the company would accelerate negotiations with the bank to prepare for financial restructuring and debt management.
The failure to meet this payment automatically triggers defaults in other obligations, the SET said. These obligations total around 9.2 billion baht, but creditors are understood not to have sent repayment notices yet. That accounts for 44% of Pace Development's total assets.
Pace Development did not respond to a request by the Nikkei Asian Review for comment.
Pace Development shares fell 13% to 0.07 baht on Monday. That level marked an 81% decline from the end of 2018. Siam Commercial Bank shares also slipped 3% to 113 baht.
Pace Development was founded in 2004 and started as a property developer. In November 2014, it moved into the retail business by purchasing Dean & DeLuca for $140 million from Dean & DeLuca Holdings.
"We expect to open hundreds of new stores in the next two years to add to the current 42, and to increase our global footprint from eight countries to more than 15 countries in the same period," said Pace Development CEO Sorapoj Techakraisri at the time. He also had plans to list the Dean & DeLuca business.
By the end of 2018, there were 79 Dean & DeLuca stores operating in 13 countries and regions, according to the company's annual report.
But Dean & DeLuca soon found strong competitors in Whole Foods and Eataly, and also online rivals.
Pace Development's cash problem became more and more severe. It reported a loss of 5.1 billion baht for full-year 2018. For the first half of 2019, it suffered a loss of 1 billion baht. Despite its chain expansion, revenue from Dean & DeLuca business shrank to 2.4 billion baht in 2018 from 4.0 billion baht in 2016.
In March, it sold its 50% stake in Dean & DeLuca Japan for $10 million to its joint venture partner Welcome Co., a subsidiary of Japan's telecommunications company KDDI.
Dean & DeLuca stores in the U.S. started closing in June. The chain had nine stores in the U.S. as of June. But its website only lists two stores in Honolulu, Hawaii, now. Its last store in New York shuttered earlier this month.
According to The New York Times, suppliers in the city had complained that they had not been paid and employees said their paychecks were frequently late.
Sorapoj told The Financial Times in August that he plans to raise $60 million in long-term debt to rescue the grocery chain. Earlier in the same month, the company tried to raise $80 million from a rights offering, which it had to scale down to $20 million.
Sorapoj then said that he was in the midst of building condominium projects in Bangkok and Hua Hin, a resort about 200 km southwest of Bangkok, which would generate cash once completed and sold.