Patisserie Valerie saved by deal backed by Irish firm

The deal is set to safeguard almost 2,000 jobs at Patisserie Valerie. Picture: Lauren Hurley/PA Wire

In a reported management buyout backed by Causeway Capital Partners, a Dublin-based private equity firm, 96 of the chain’s sites have been saved. The deal does not include a further 27 outlets belonging to Patisserie Valerie’s sister brands Philpotts and Baker & Spice.

In a separate buyout, West Midlands-based food wholesaler A.F. Blakemore & Son has snapped up all 21 Philpotts sandwich shops.

Collectively, the two chains were sold for £13 million, comprising £10m in cash payment and £3m deferred consideration.

An announcement regarding the Baker & Spice subsidiary is expected to be made soon, with parent company Patisserie Holdings indicating that there had been “strong interest” in the brand.

The confirmed deals have rescued the cake chain from administration after it was put up for sale in January following the discovery of fraudulent activity in the company’s accounts.

Patisserie Holdings was plunged into turmoil in October when “significant, and potentially fraudulent, accounting irregularities” were uncovered.

Last month the firm said the extent of fraud meant it was unable to renew its bank loans with HSBC and Barclays and it did not have sufficient funding to continue trading, leaving it with no option but to enter into administration.

Administrator KPMG has since closed around 70 Patisserie Valerie outlets, resulting in 920 redundancies, but kept the remaining sites open in the hope of finding a buyer.

Sports Direct tycoon Mike Ashley subsequently submitted a bid for Patisserie Valerie, but later withdrew the offer, saying that he had been locked out of the process by KPMG.

Causeway Capital’s Matt Scaife said: “Patisserie Valerie is heritage brand, much loved by its loyal customers. This investment should mark the end of a turbulent period for customers and suppliers alike.”

Patisserie Valerie chief executive Steve Francis added: “We are delighted to welcome Causeway Capital as our partners in Patisserie Valerie, ending a disruptive period of uncertainty for the business.

“The affection and loyalty for the brand among our customers and employees, and Causeway Capital’s enthusiasm and support for the business, creates for us the foundations for an exciting future for the business.”