Embattled cafe chain Patisserie Valerie has fallen into administration, four months after “fraudulent” activities were discovered in its accounts.
The company was in talks to extend the standstill of its bank facilities beyond 18 January, but discussions failed and it was unable to renew its bank facilities. The company said it didn’t have “sufficient funding to meet its liabilities”.
KPMG has been appointed as administrators, and will close 70 outlets immediately. Some 121 will remain open while the company tries to find a buyer. Chairman Luke Johnson has also extended an unsecured, interest-free £3m loan to help ensure January wages are paid to all staff working in the ongoing business. The loan is also expected to assist the administrators in trading as many profitable stores as possible while a sale process is undertaken.
Patisserie Valerie said its collapse was a “direct result of the significant fraud” it had discovered since October, which led to the arrest and subsequent resignation of its CFO Chris Marsh.
KPMG’s administrators Blair Nimmo and David Costley-Wood 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.
“Unfortunately, however, we have had to take the difficult decision to close 70 stores resulting in a significant number of redundancies. We will be working with those affected employees, providing all support and assistance they need.”
