Bangkok based real estate developer, PACE Development Corporation plc (PACE) recently announced that it had entered into an agreement for the purchase of one of the world’s most iconic gourmet food brands, Dean & DeLuca, as well as its global business and assets for US$ 140 million (approximately 4,550 million baht) from Dean & DeLuca Holdings, Inc.
The move aims to boost PACE’s capabilities as a developer of super-premium mixed use developments as well as fuel rapid global growth of the Dean & DeLuca gourmet food and beverage retailing business.
Sorapoj Techakraisri, Chief Executive Officer of PACE Development Corporation plc.
The purchase includes the supply chain and operations of eleven outlets and two commissaries in the United States as well as the licensing agreements in 31 international locations, among them four outlets in Thailand, as well as outlets in Japan, Singapore, South Korea, Kuwait, Qatar, and the United Arab Emirates.
Sorapoj Techakraisri, Chief Executive Officer of PACE, commented, “We aim to capitalise on the global convergence of super-premium mixed-use property development and lifestyle brands. The high margins in the business of premium property development of the future will be in offering customers a lifestyle – not just bricks and mortar. People want a total delivered environment where they feel good about living. It’s why we must be able to bring into our properties some of the world’s best lifestyle brands. It’s a proven model already being successfully deployed by thought-leaders in property and retail property development.”
Sorapoj said that the iconic Dean & DeLuca brand also has extraordinary potential for rapid growth globally: “We expect to have stores numbering in the hundreds within only two years, up from the current 42 stores, and to increase our global footprint from eight countries at present to more than 15 countries in the same time, primarily through licensing and company’s own store investment,” he said, adding that, “This (Dean and DeLuca) is one of the world’s great brands and has an equity that is as distinct as it is strong, standing for the finest food and food-related products, while the business has a well-established track record of almost 40 years.”
PACE already has a portfolio of joint endeavours with premium global brands in lifestyle and specialty retailing including fashion icon Vogue Lounge, multiple Michelin-star gourmet dining L’Atelier de Joël Robuchon, and PACE’s Ritz-Carlton Residences, which was recently presented the ‘Best Condominium Development – South East Asia’ Award at the 2014 South East Asia Property Awards.”
Sorapoj noted that the approach of the ASEAN Economic Community created major opportunities for Thailand-based companies and that he firmly believed companies must go global to protect their business from the greater regional competition that will come with the arrival of the AEC.
“The Dean & DeLuca acquisition strengthens us by generating another sustainable revenue stream for PACE that is less cyclical than property development and less prone to external economic shocks,” he said, adding that the global acquisition of the Dean & DeLuca business would also boosts PACE’s ability to attract and retain the best talent by raising the ceiling on staff career growth prospects within PACE.
The funding for the acquisition is from PACE internal cash-flow as well as a loan from Siam Commercial Bank plc.
In a related development, PACE also advised that it will increase its ownership of the MahaNakhon mixed-use development in Bangkok to 100 percent as well as its related businesses through a share swap arrangement with Industrial Buildings Corporation (IBC). IBC will be taking a 20.9% holding in PACE Development Corporation plc in exchange for its holdings in MahaNakhon and related businesses.
