Patisserie Valerie chain crashes into administration with 3000 job losses

Patisserie Valerie, the café chain chaired by Luke Johnson, is victim of widespread accounting fraud, has crashes into administration after last- minute talks with banks failed to secure a financial lifeline.

The restaurant group said the collapse was a “direct result” of the fraud, which produced accounts showing £28m in cash rather than the £9.8m in net debt that was actually in its accounting books.

“Regrettably the business does not have sufficient funding to meet its liabilities as they fall due”, the company said in a stock exchange statement after days of renegotiations with its two main lenders HSBC and Barclays, failed to secure in an extension to its banking facilities.

KPMG who will act as administrators said 70 of the chain’s cafes and concessions would close immediately resulting in a significant number of redundancies. Blair Nimmo joint administrator said “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 customers. At the same time we will be seeking a buyer.”

Patisserie Valerie whose original café was opened in Soho, London, in 1926 by Belgian born Madame Valerie, employs almost 3000 at site in high street, shopping centres and railway stations. It has also concessions in some branches of Debenhams and a supply agreement with supermarket J Sainsbury.