Patisserie Valerie’s managers rescue chain

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Reuters

Patisserie Valerie is being bought out of administration, saving 96 shops and nearly 2,000 jobs.

The management team at the coffee and cake chain has secured backing from investment firm Causeway Capital to take over its ownership.

Sister brand Philpotts has also been sold in a separate deal, saving a further 21 stores.

Collectively the chains fetched £13m – a fraction of what the group was once worth.

Patisserie Valerie’s parent company, Patisserie Holdings, collapsed in January following an accounting scandal.

Patisserie Valerie’s chief executive, Steve Francis, who is leading the management team buy-out, said the move would end “a disruptive period of uncertainty for the business” and provide the foundation for “an exciting future”.

Matt Scaife, a partner at Dublin-based Causeway Capital, said Patisserie Valerie was a “much loved” heritage brand that his firm looked forward to helping return to growth.

The deal does not include outlets belonging to another subsidiary, Baker & Spice, but Patisserie Holdings said there had been “strong interest” from potential buyers.

Patisserie Valerie was plunged into crisis in October when accounting irregularities were uncovered. It hired KPMG to try to salvage the brand which dates back nearly 100 years.

KPMG closed 70 outlets, with the loss of 920 jobs. Restructuring talks broke down in January, leaving no option but administration.

The Serious Fraud Office is carrying out a criminal investigation into Patisserie Valerie and finance director Chris Marsh was arrested and released on bail after having been suspended by the company.

Also under investigation, by the Financial Reporting Council, are former Patisserie Valerie auditors Grant Thornton.

The first Patisserie Valerie opened in Soho in 1926, established by Belgian Esther van Gyseghem and her husband. The chain expanded rapidly across the UK after entrepreneur Luke Johnson invested in the brand in 2006.