Patisserie Valerie faces closure without immediate cash injection
PATISSERIE Valerie is teetering on the brink and needs “an immediate injection of capital”, the bakery chain has admitted.
If the company is unable to raise the cash, it told the market yesterday afternoon, there “is no scope for the business to continue trading in its current form”. Luke Johnson, Patisserie Valerie’s executive chairman and largest shareholder, is reportedly teeing up a multi-million-pound rescue package.
The latest development throws into question the immediate future of its 206 shops and 2,500 staff.
A raft of advisers, believed to include forensic accountants from PwC and lawyers from Osborne Clarke, have been assisting the chain in getting to the bottom of a “potentially fraudulent” accounting mis-statement. PwC has been put on alert to manage the company’s administration if rescue funding falls through.
The company said: “There is a material shortfall between the reported financial status and the current financial status of the business.”
Chief financial officer Chris Marsh, who has overseen the books for 12 years, has been suspended. If the company does collapse, it would wipe away a large proportion of the £260m net wealth of Johnson, one of Britain’s best-known leisure entrepreneurs. The former Pizza Express chairman owns around 37pc of the Patisserie Valerie, a stake that was worth around £165m when shares were suspended on Wednesday morning. He is considering a “significant cash injection”, The
Times reported. The company’s problems were compounded after it revealed HM Revenue & Customs had filed a petition to wind up Patisserie Valerie over an unpaid bill of £1.14m.
While the outstanding debt appeared to be small compared with a reported black hole of £20m, experts warned the taxman’s legal action could see the bakery and coffee chain’s bank accounts frozen. Octopus Investments, the company’s second-largest shareholder, said that it did not have any more information than is being put into the public domain. Other large institutional backers such as Aberdeen Standard Investments and Royal London declined to comment.
It is understood that regulators from the Serious Fraud Office, Financial Conduct Authority and Financial Reporting Council are closely tracking developments.