3,000 jobs at risk as Patisserie Holdings appoints administrators, KPMG, in the wake of £40m accounting black hole at its flagship bakery chain
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300 jobs have been lost across Patisserie Holdings' bakery chain portfolio following the collapse of Patisserie Valerie.
Photo: Tony Monblat
Patisserie Holdings will immediately close around 70 of its circa-200-store portfolio, which includes the Druckers Vienna Patisserie, Philpotts, Baker & Spice and Flour Power City brands, with the loss of 300 jobs. In press statement, the firm said it had been unable to renew its bank facilities and therefore “does not have sufficient funding to meet its liabilities”.
Patisserie Valerie is the third-largest food-focused branded coffee chain in the UK, with 156 stores. The firm was rocked by a financial scandal in October 2018, when accounting irregularities amounting to £40m were uncovered. The revelations resulted in the arrest of the company’s finance director, Chris Marsh, and prompted the company’s chairman, Luke Johnson, to issue an emergency £20m loan of his own money to shore up the business. Johnson was later reimbursed £10m after other shareholders agreed to inject £15m in new funds.
In January 2019, Patisserie Holdings revealed accounts at the bakery chain had been “significantly manipulated” with “thousands of false entries into the company’s ledgers.”
Blair Nimmo of KPMG, a joint administrator of the business, said: “Our intention is to continue trading across the profitable stores, as collectively the brands have a strong presence on the high street and have proven very popular with consumers. At the same time, we will be seeking a buyer for the business and are hopeful of a good level of interest.”
Patisserie Valerie’s collapse puts around 3,000 jobs at risk and store closures will exacerbate challenging trading conditions on the UK high street. In 2018, New Look, Carluccio’s, Byron and Waitrose all closed stores, with coffee chains Cinnabon and Caffè Fratelli closing completely. Cafés and coffee shops have, however, proved more resilient than their retail and casual dining counterparts, with Allegra recording the sector achieved 7.9% sales growth in 2018.