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Dean & Deluca set for US listing

Pace Development Corporation plans a US IPO of Dean & Deluca, the brand it brought from America just last year.

Sorapoj Techakraisri, Pace CEO, says the growth of the Dean & Deluca business is so fast it will soon exceed the company’s core property interests. The company expects to achieve THB 3.3 billion (US$98 million) worth of sales in 2015.

Now it plans to focus on expanding the Dean & Deluca specialty cafe format, which requires lower capital investment while giving operators/licensees’ flexibility and convenience in operational terms. The time it takes to set up a store is short and the return on investment is high.

Pace says it will aggressively expand Dean & Deluca and list the company on “a reputable stock exchange within three years”. It believes, a high IPO valuation is achievable when compared with other peers in the same market segment.

Dean & Deluca generates income from sales in company owned stores in the US and Thailand and from its licensed stores in five countries – Japan, Singapore, South Korea, Kuwait, and the Philippines. It foresees “tremendous opportunities” for specialty café format stores where scale is easier and faster to manage while this type requires minimum investment.

“From our study in the US market, Dean & Deluca food business falls between fast-food and high-end F&B segments. According to market research, we found this segment is extremely popular and has potential to grow as the customers today have become more selective and have diverse lifestyle demands and they are looking for a trendy and high quality restaurants and cafés. With the US economy recovering, the growth of world middle income population, as well as the brand’s iconic New York status and its solid customer base, Dean & Deluca has a very high potential to grow both in US and overseas. At first stage, the focus will be the opening of new US Dean & Deluca branches in CBD and prime tourist locations targeting high-end consumers who appreciate high quality food and beverage products.”

Founded 38 years ago in New York, Dean & Deluca brand has been known for its premium, quality food, coffee and cooking ingredients. It is an iconic New York brand that is trendy, unique and highly successful in both the US and other markets.

“Dean & Deluca has a high potential to grow exponentially and we believe the company can drive its growth worldwide in the future as Dean & Deluca brand is well accepted and has already passed the introduction stage. So Pace can focus on the expanding the businesses without employing a lot of time and budget for brand building.”

The company will also work on expanding its licensing business.

“Pace plans to increase the number of Dean & Deluca licenses throughout Asia, Australia, Europe, as well as Central and South America where the demand for Dean & Deluca is high. We have seen opportunities in these new major cities as consumers are more inclined to embrace new brands, ideas, and concepts, and also have higher spending power.

“As can be seen from our new Dean & Deluca store opening in the Philippines, it enjoys a huge success as consumers in this market have evolved significantly, which is in line with the integration of AEC in the near future,” said Sorapoj.

In Japan Dean & Deluca has proven highly successful At the launch of its Fukuoka flagship branch, 10,000 Dean & Deluca totes were sold within just one week. Currently Dean & Deluca Japan stores are mainly operating in specialty café format situated in subway, or prime business and tourist locations.

Pace’s local Japanese license holder is committed to opening three new stores by the end of 2015, 300 – 800 sqm sites in major cities such as Fukuoka and Osaka.

Last year, Pace realised a total value of 469 million THB from its global Dean & Deluca operations. The company’s Q1 performance shows approximately 623 million THB.

Dean & Deluca Thailand currently has four branches and will soon open its fifth at Emquartier.

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