Patisserie Valerie’s two Dublin outlets will likely cease trading as part of a company-wide administration which follows on from “significant fraud” at the bakery chain.
While the two outlets – on Henry Street and in Blanchardstown – don't fall under the UK administration, a spokesman for administrator KPMG said they have closed alongside 71 outlets in the UK. The closure of those 71 stores, all based in England, will result in the loss of 920 jobs.
It is unclear how many jobs will be lost at Patisserie Valerie’s Dublin operation as a result of the administration.
“Since our appointment less than 24 hours ago, we have been pleased with the level of interest we have received in the business, and so remain hopeful of achieving a positive outcome.
“In the meantime, we can reassure customers that across the remaining 122 stores, it is all but business as usual,” David Costley-Wood, KPMG partner and joint administrator, said in a statement on Wednesday evening.
The future of the Dublin outlets of the bakery and cafe group hung in the balance on Wednesday after chairman Luke Johnson personally extended an unsecured, interest-free loan of £3 million (€3.4 million) to ensure the January wages were paid and to assist the administrators in trading "as many profitable stores as possible".
A notice at the Henry Street branch, which was located in Debenhams, said: "Patisserie Valerie has closed until further notice. Our Debenhams restaurant is now open on the 3rd floor. Thank you."
The 71 store closures in the UK include stand-alone Patisserie Valerie restaurants, 19 Druckers stores and 25 concessions in Debenhams, Next and at motorway service stations.
Extensive fraud
The fall into administration came after the London-headquartered bakery group was unable to renew its banking facilities following extensive fraud discovered in its accounts.
The insolvency will wipe out investors in the chain, whose shares haven’t traded since the scandal erupted in October. The loss of at least 70 bakeries adds to the empty storefronts on the UK’s shopping streets, where retailers ranging from electronics chain Maplin to the British arm of Toys “R” Us have already disappeared.
Former Patisserie finance director Chris Marsh and former company auditor Grant Thornton are under investigation by UK regulators, and the Serious Fraud Office has opened a criminal investigation.
Mr Johnson had worked to save the business from insolvency, saying in October that he had loaned it £20 million to stave off collapse. The company also said then that it raised £15.7 million through the issuance of new shares.
After Patisserie hired forensic accountants to comb through its accounts, they discovered “very significant manipulation of the balance sheet and profit-and-loss accounts”, according to a statement last week.
Mr Johnson's private equity firm Risk Capital Partners backed the acquisition of Patisserie Valerie 80 years after it opened in London in 1926.
The serial entrepreneur, who first made his fortune by investing in the successful restaurant chain Pizza Express, also holds shares in the Brighton Pier on England's south coast and swimming brand Zoggs International. – Additional reporting: Bloomberg
