With De Loach Vineyards mired in Chapter 11 bankruptcy, Burgundy-based négociant Boisset has agreed to pay $17.5 million for the Sonoma County producer's brand name, key trademarks, inventory and original winery.
The sale was approved Friday at a hearing in the U.S. Bankruptcy Court in Santa Rosa, Calif. The purchase marks Boisset's largest investment yet in the United States. While the company's existing California brands -- Lyeth, Joliesse, Christophe and Fog Mountain -- are produced at contracted facilities, the De Loach purchase gives Boisset a "domaine" in the Russian River Valley.
De Loach also fits Boisset's new vision of itself. Boisset, La Famille des Grands Vins, is France's third-largest wine company, with a portfolio of 38 brands from France and the New World and an annual production of 3.75 million cases. But in Burgundy, the Nuits-St.-Georges-based company is moving to decentralize its production from an industrial-size winemaking facility to small wineries close to vineyards throughout the region.
"We are now into vineyard sites and handmade, tailor-made wines," Jean-Charles Boisset, president of Boisset America, told Wine Spectator in a recent interview.
Not part of the sale are two De Loach winemaking facilities, including a 250,000-case capacity plant just down the road from the original winery. Founders Cecil and Christine De Loach will also retain about 450 acres of vineyards, including some of the winery's prized old-vine Zinfandel sites.
The De Loach family will remain involved in the winery. Cecil and Christine have long-term contracts to sell grapes to the new owners, and their son Michael will stay on as winery president. Winemaker Dan Cederquist will also remain onboard.
"We view this transition as a partnership between our two families, which will give us together the opportunity to take the De Loach portfolio to the next level, while at the same time allowing us to further our quest for great terroirs in one of the world's best wine-producing regions," Boisset said in a statement.
About $7 million in debt will remain, Michael De Loach said, but the winery expects to reduce that by more than half with the sale of other assets.
Launched by the De Loach family 28 years ago, the winery had grown to one of Sonoma County's largest by the time it filed for bankruptcy protection in May, citing nearly $30 million in debt and a net loss of $2.6 million in the previous year.
"There was definitely a problem in trying to grow the brand over 180,000 cases," De Loach said. "There were way too many products [in the portofolio] and the brand became unfocused."
De Loach said his family and Boisset share a common vision about the winery. Production has been downsized to about 90,000 cases and the focus will be Russian River Chardonnay, Pinot Noir and Zinfandel, De Loach said. Varietals such as Sangiovese, Viognier and Pinot Gris have been dropped, along with the winery's entire line of inexpensive California-appellation wines. A backlog of inventory was recently sold at a discount through retailer Trader Joe's.
"Consumers will see a new De Loach that is kind of like the old De Loach of 1994 or 1995, when our wines sold out and were on allocation," De Loach said.
De Loach admits that he has mixed emotions about the sale. "The Boissets were very concerned that [our] family would be left in good shape and that the sale would be beneficial to both sides," he said. "I'm pleased that with this sale that hopefully De Loach Vineyards will be able to emerge from bankruptcy, and I'm happy that dad will be able to continue to grow grapes."
The sale is expected to be final on Monday.
Check our recent ratings of De Loach wines.
Read about other California wineries' recent financial troubles:
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