Business as normal for Patisserie Valerie after rescue package, chairman says
Luke Johnson told the Press Association that the company was ‘back on stable footing’.
Patisserie Valerie’s chairman has said it will be “business as normal” at the cafe chain after swooping in with a rescue package that saved nearly 3,000 jobs and the company from collapse.
Luke Johnson told the Press Association said that while he was unlikely to open more stores in the near future, his “huge personal commitment” to the business should be enough to reassure both shareholders and employees.
“We have rescued the business,” he said in an interview following a torrid 72 hours for the company.
“I’ve never experienced anything like it in my life but we’ve come through it in this week – I’ve obviously made a huge personal commitment, I think we have a good business with loyal staff, and I think of it now as back on stable footing.”
The chairman came through with a major rescue package on Friday that saw him pledge up to £20 million in new loans to keep the company afloat.
“I did it because I believe in Patisserie Valerie. I spent 12 years involved with this business, we’ve employed 2,800 staff and rescuing it has essentially saved those jobs and I believe it has a strong future,” he said.
The company also successfully raised more than £15 million through the issue of new shares.
“The money will flow into the business in the coming days,” Mr Johnson explained.
While at least two London stores were shuttered by landlords over overdue rent payments, Mr Johnson said: “No stores will be taken back (by landlords).
“This is not the climate where landlords want retail sites back, frankly, so I’m very confident that we will be opening all our stores for business tomorrow.”
Mr Johnson, a serial entrepreneur, is the largest shareholder in Patisserie Holdings, and had a 37% stake in the business ahead of the rescue deal.
The company’s future was thrown into question earlier this week after it uncovered fraudulent activity around its financial accounts and was served a wind-up order by the taxman over £1.14 million owed to HM Revenue & Customs.
In a statement issued to the market on Friday afternoon, Patisserie Holdings said the loans would enable it to continue trading for the “forseeable future”.
It had been feared that the company could go into administration as soon as this week, with advisers at PwC thought to be on stand-by for a collapse.
“We are going to cease new openings for a period and focus on making the most of what we have, we are going to stabilise our relations with suppliers, landlords, etc., we’re going to beef up our systems and controls,” Mr Johnson said in an interview with PA.
“Obviously we are going to make some additions to the senior leadership, particularly in finance.”
Directors said that initial investigation showed that historical statements on the cash position of the company were misstated and subject to fraudulent activity and accounting irregularities, directors said.
The group’s finance director Chris Marsh, who was suspended from his role earlier this week, has since been arrested on suspicion of fraud, but was later released.
The Serious Fraud Office has now opened a criminal investigation.
Patisserie Holdings – which owns additional brands such as Druckers, Philpotts and Baker & Spice – trades from more than 200 stores and also has a partnership with Sainsbury’s, with branded counters present in the supermarket.
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