Patisserie Holdings administrator KPMG is to immediately close 70 sites following the collapse of the business last night.
Patisserie Holdings operated more than 200 sites – 153 Patisserie Valerie, 22 Philpotts, 20 Druckers, four Baker & Spice and one Flour Power City Bakery – and employed 3,200 staff.
The locations of the 70 sites and concessions that are closing have not yet been revealed, as staff are still being informed today, but administrator KPMG said the move would result in a significant number of redundancies. Further details of the closures may be available later today.
KPMG will continue to trade from 121 stores while looking at options for the business, including exploring a sale as a going concern. The Patisserie Holdings management team, headed by CEO Steve Francis, who joined the business in November, will assist with this process.
“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,” said KPMG restructuring head and joint administrator Blair Nimmo.
“At the same time, we will be seeking a buyer for the business and are hopeful for a good level of interest.”
Patisserie Holdings called in administrators yesterday after failing to renew its banking facilities, stating “regrettably the business does not have sufficient funding to meet its liabilities as they fall due”.
The company had narrowly avoided collapse last year after a £20m black hole was discovered in its finances. In recent weeks, Patisserie Holdings said work carried out by the company’s forensic accountants had revealed “extensive misstatement of its accounts”, including thousands of false entries in its ledgers.
The company brought in KPMG to help review all options available to it in order to recover from the “devastating effects of the fraud”. It had also been in discussion with its bankers to extend the standstill of its banking facilities beyond an 18 January deadline, and it was failure to achieve this that led to last night’s administration.
Patisserie Holdings last night announced that chairman Luke Johnson was making an unsecured, interest-free £3m loan to help ensure the January wages were paid to all staff working in the ongoing business, reported the company.
Sainsbury’s today said it was too soon to say how the situation would impact its arrangement with the business. Patisserie Valerie supplies cakes and pastries to 70 Sainsbury’s stores, which sells them in the brand’s own presentation boxes. The supermarket added that it continued to work with Patisserie Holdings and KPMG as they seek a buyer.