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Dean & Deluca will not pay US licensed staff
Thailand's luxury food chain fails to pay government severance packages
Pedestrians walk past a Dean store and DeLuca Soho in Manhattan. The Thai chain has closed other stores in the United States because of its expansion abroad and has told its former employees that they would not be paid. (Jeenah Moon / The New York Times)
Dean & DeLuca, Thailand's debt-laden luxury food chain, has defaulted on government-mandated payments to former employees and blocked payments to current employees in the United States, according to employee accounts and documents received by The New York Times.
The parent company, Pace Development in Bangkok, has not responded to repeated requests for comment.
In recent weeks, four Dean & DeLuca coffees have closed, including Stage, the company's new expensive gem in Manhattan's trendy Meatpacking neighborhood in New York City; it had been open for only three months.
In the United States, there are only four stores left, and almost naked store shelves are filled with supermarket products rather than the delicacies on which the chain has relied to build its brand. When Pace bought Dean & DeLuca in 2014, there were more than 40 sites in the United States.
The wichita eagle Also reported layoffs this week at the company's US headquarters in Wichita, Kansas. And the San Francisco Chronicle announced that workers fired from the Napa Valley box office, who had not yet received a final payment, were considering bringing a clbad action suit against the company.
Pace CEO Sorapoj Techakraisri announced last month a plan to reorganize the delicatessen business in delicatessen by separating operations in Asia and the United States for restructuring. business.
The US operation Dean & DeLuca, he said, was implementing a "volume reduction" strategy through cost control and business mergers to minimize losses from unprofitable branches. The goal is to stop the losses for the US channel by the end of this year, he added.
Meanwhile, Sorapoj has touted the chain's growth in Asia and the Middle East, where the company has about 70 stores, many of which are licensed franchisees. According to Retail News Asia, he said at a press conference that an additional 90 stores in Thailand would open in the next five years and that the brand would be launched in five other Asian capitals.
About US stores, he said: "We are adjusting the business of Dean & DeLuca to a more appropriate size by controlling expenses, both in its offices and in its stores."
At the same time, American sellers of homemade baguettes, smoked fish, hot sauce, chocolates and more, owed hundreds of thousands of dollars, cut the channel's credit. According to several former and current employees, homeowners have sent eviction notices to two New York stores that are now closed, citing hundreds of thousands of dollars in unpaid rent.
A former employee, who requested anonymity to avoid retaliation from the company, said the laundry service had stopped providing clean uniforms.
It now seems that these employees will also pay for the financial collapse of the chain.
Although the chain has been in free fall for months, Mr. Sorapoj told a representative last month that current employees would continue to be paid. However, weekly pay checks were delayed several times, including on Friday, when employees said they received notice to receive checks on Monday.
Mr. Sorapoj also reiterated that the approximately 180 former employees who lost their jobs in July, when the stores closed, would be "taken care of". Letters sent to these employees at the time told them that they would be paid in accordance with the Federal Act of 1988 on the notification of changes in the number of employees and retraining of workers (WARN Act) .
The law requires large employers to compensate workers who lose their jobs upon the closure of a business with less than 60 days' notice. Employees at the St. Helena, California, Upper East Side and New York scene stores were informed that they would receive compensation of up to 10 weeks of work each day. unused vacation, benefit deductions, deductions from the pension fund and the last paycheck.
But this week, the same employees received a letter in which they acknowledged that the company would not make these payments "because the company is losing speed and due to unforeseen circumstances". It also states that Dean & DeLuca is no longer funded by its parent company and that the owner has recently attempted to sell the business, without success.
The wording of the letter indicates that the company intends to argue that the closure does not fall under the WARN Act, which was amended in 2017 to provide exceptions for employers who can prove that the closure is due to a natural disaster or unpredictable business circumstances, and made a good faith effort to obtain financing.
These employees were asked to address any future questions to an internal lawyer in Wichita. Phone calls to the number indicated in the letter go directly to voicemail.
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