The crisis-hit owner of Patisserie Valerie has warned that without an immediate injection of capital there is “no scope for the business to continue trading in its current form”.
Patisserie Holdings issued the bleak update a day after it revealed that it had learned of “potentially fraudulent accounting irregularities” resulting in the misstatement of its financial position, and suspended trading in its shares.
The company said on Thursday that investigations over the last 24 hours had prompted it to conclude that there was “a material shortfall between the reported financial status of the business and the current financial status of the business”.
Directors now believed that an “immediate injection of capital” was needed and were “assessing all options available to the business to keep it trading”.
It was not immediately clear whether stores would be able to remain open for the time being or what the future would hold for the company’s 2,500 staff.
The options open to the company are likely to include going into administration. A spokesman was unable to comment on this or as to whether any other solutions to the crisis looked likely.
Sky News had first disclosed on Tuesday evening that shares were to be suspended the following day as Patisserie Holdings investigated a black hole in its accounts that could exceed £20m.
The company confirmed this on Wednesday and revealed that finance director Chris Marsh had been suspended.
It further disclosed that it had just learned of a winding-up petition that had been filed against its main subsidiary relating to more than £1m owed to the UK tax office.
Patisserie Holdings – which had a market value of nearly £450m before shares were suspended this week – operates from more than 200 stores.
The company’s current situation creates a huge headache for Luke Johnson, one of Britain’s best-known and most successful entrepreneurs, who is Patisserie Holdings’ executive chairman and largest shareholder.
He bought a 70% stake in the business in 2006 and his current 37% holding was worth approximately £200m ahead of the suspension in trading.
Mr Johnson is a serial entrepreneur who has enjoyed huge success with restaurant chains including Pizza Express – and this year, he has tried to engineer takeovers of others such as Gaucho, which collapsed into administration during the summer.
The first Patisserie Valerie was opened in London’s Soho district in 1926 by the Belgian-born Madame Valerie, according to the company’s website, expanding later under new owners.
From – SkyNews