Lees wins £225,000 over Patisserie collapse

Published on Friday 4 December 2009 21:28

MACAROON maker Lees of Scotland has been awarded £225,000 in compensation after the collapse of Patisserie UK, its failed bakery business.

The settlement, struck without admission of liability by either side, ends a dispute over Patisserie's loss of its key customer, Costa Coffee, and collapse into administration less than 18 months after Lees bought it.

Coatbridge-based Lees acquired Patisserie, which supplied cafes and hotels with baked goods, for 2.45 million in December 2007. Its first acquisition since listing on the Alternative Investments Market in 2005, the deal diversified Lees away from confectionery.

Patisserie generated annual turnover of about 3.5m at the time of the deal. But within weeks Costa Coffee, which accounted for three-quarters of its sales, said a quarter of that business would be sourced elsewhere.

Less than a year after the sale Costa had told Patisserie it planned to move the rest of its business elsewhere, prompting Lees to attempt to sell the business, eventually placing it into administration in March this year. By the time the business was closed Lees had begun legal action.

Lees said the takeover had been negotiated in good faith, blaming the loss in sales on "unforeseen circumstances". Patisserie's former directors and shareholders have agreed to pay Lees 125,000 and return 65,000 shares that were part of the deal.