Patisserie Valerie saved as chairman lends cafe chain £10m
Patisserie Valerie has been saved from closure after chairman Luke Johnson agreed to lend the struggling company £10 million, days after a black hole in the firm’s accounts was uncovered.
Earlier this week, the firm’s finance chief, Chris Marsh, was suspended from the group after the bakery chain uncovered “significant, and potentially fraudulent, accounting irregularities”.
On Thursday night, Mr Marsh was arrested on suspicion of fraud, and is now facing a criminal investigation by the Serious Fraud Office.
The Birmingham-based company has cafes in Wolverhampton, Telford and Shrewsbury.
The accounting crisis put thousands of jobs at risk, with Patisserie Valerie admitting on Wednesday that the gap in its accounts had “significantly impacted the company's cash position and may lead to a material change in its overall financial position”.
On Thursday, the group said that unless it could receive an “immediate injection of capital”, it would be forced to stop trading, putting 2,500 jobs at risk across the UK. The company is now urgently trying to find new funding.
Stores are still trading, although a branch in Hammersmith was shut today after a landlord terminated its lease due to non-payment of rent.
The firm also revealed this week that HMRC had filed a winding up petition against its main trading subsidiary, Stonebeach, over an unpaid £1.14 million tax bill.
Julie Palmer of accounting firm Begbies Traynor said the winding-up petition had been issued last month, giving the group 21 days to deal with the issue.
"There is a whole sequence of events here where we're talking about a listed company which until Wednesday was worth over £400 million,” she said.
"It is actually quite staggering that the winding-up petition has happened without any notification to the stock market and I believe even the board said they weren't even aware this had been served on the company."