Cake chain Patisserie Valerie gobbled up by Irish private equity firm

Cake chain Patisserie Valerie has been bought out of administration by an Irish private equity firm, safeguarding nearly 2,000 jobs.

Dublin-based Causeway Capital Partners has snapped up 96 Patisserie Valerie sites. However, the deal does not include outlets belonging to sister brands Philpotts and Baker & Spice.

In a separate deal, food wholesaler A.F. Blakemore & Son has picked up all 21 Philpotts stores and an announcement regarding Baker & Spice will be made imminently.

Patisserie Valerie, which was chaired by businessman Luke Johnson, was put up for sale last month after collapsing following the discovery of fraudulent activity in its accounts.

Sports Direct tycoon Mike Ashley subsequently submitted a bid for the chain, but later withdrew it, complaining that he had been locked out of the process by KPMG, which is managing the administration.

Causeway Capital’s Matt Scaife said on Thursday: “Patisserie Valerie is heritage brand, much loved by its loyal customers. This investment should mark the end of a turbulent period for customers and suppliers alike.”

The cake firm’s parent company, Patisserie Holdings, has been grappling with the fallout of the accounting fraud since October.

Last month the firm said the extent of fraud meant it was unable to renew its bank loans with HSBC and Barclays and it did not have sufficient funding to continue trading, leaving it with no option but to appoint KPMG as administrator.

KPMG has already closed 70 stores, resulting in 920 redundancies.

Patisserie Valerie chief executive Steve Francis said: “We are delighted to welcome Causeway Capital as our partners in Patisserie Valerie, ending a disruptive period of uncertainty for the business.

“The affection and loyalty for the brand among our customers and employees, and Causeway Capital’s enthusiasm and support for the business, creates for us the foundations for an exciting future for the business. ”