Lees Foods’ Patisserie UK subsidiary has been placed into administration after attempts to sell it as a going concern proved unsuccessful.
Patisserie UK, a bespoke manufacturer of coffee shop round cakes, loaf and tray cakes, desserts and biscuits, suffered due to the loss of a major customer - Costa Coffee - last year.
When Lees Foods acquired the business in 2007, Costa represented 75% of Patisserie UK’s sales, but according to the company, within three weeks of the acquisition Costa announced it was to source a quarter of this business elsewhere.
“In late December 2008, Costa Coffee notified Patisserie UK that it would be transferring all of its then remaining requirements from Patisserie UK to other suppliers. It has not been possible to replace this level of sales in an appropriate time frame and consequently the company is in a loss-making situation,” read a statement from Lees.
Established in 1994, Patisserie UK currently employs 41 people at its Livingston base in West Lothian. “At a time when the other parts of the Group have been performing satisfactorily, it is with regret that the Board had to arrive at this disappointing decision,” commented Raymond Miquel, chairman and managing director of the Lees Group.
Following a trading update from the company in February, its directors carried out a review of the business after a “disappointing” performance in 2008, with losses for the 12 months to 31 December 2008 totalling over £20,000.
According to Lees Foods, its other subsidiaries - Lees of Scotland and Waverley Bakery - will not be affected by the decision and continue to trade in line with expectations.
David Hunter, from Scotland-based charted accountants Campbell Dallas, has been appointed as administrator for Patisserie UK.