Patisserie Valerie ‘saved from collapse’ as chairman steps in with £20m loan after finance chief arrested over ‘missing cash’
Luke Johnson swooped in with a rescue package that saved nearly 3,000 jobs from his own pocket
PATISSERIE Valerie's chairman claims to have saved the company from collapse with a £20million loan after the finance chief was arrested over "missing cash".
Luke Johnson has said it will be "business as normal" at the cafe chain after swooping in with a personal rescue package that saved nearly 3,000 jobs.
While he's unlikely to open more stores in the near future, Mr Johnson said his "huge personal commitment" to the business should be enough to reassure both shareholders and employees.
After a torrid 72 hours for the firm, he said: "We have rescued the business.
"I've never experienced anything like it in my life but we've come through it in this week.
"I've obviously made a huge personal commitment, I think we have a good business with loyal staff, and I think of it now as back on stable footing."
The chairman came through with a major rescue package on Friday that saw him pledge up to £20million in new loans to keep the company afloat.
He said: "I did it because I believe in Patisserie Valerie. I spent 12 years involved with this business, we've employed 2,800 staff and rescuing it has essentially saved those jobs and I believe it has a strong future."
The company also successfully raised more than £1million through the issue of new shares.
Mr Johnson explained: "The money will flow into the business in the coming days."
Funds raised through the share placement will be used to pay back around half the money loaned by Mr Johnson, as well as to meet outstanding liabilities including a major tax bill owed to HM Revenue & Customs.
While at least two London stores were shuttered by landlords over overdue rent payments, Mr Johnson said: "No stores will be taken back (by landlords).
"This is not the climate where landlords want retail sites back, frankly, so I'm very confident that we will be opening all our stores for business tomorrow."
It comes as the finance chief of Patisserie Valerie's parent firm was arrested by police just days after the discovery of potentially fraudulent accounting irregularities.
Patisserie Holdings said in a market announcement on Friday that Chris Marsh, who was suspended from his role earlier this week, has since been released on bail.
The announcement came days after the cafe chain owner said it had discovered a major '£20m black hole' in its accounts.
Patisserie Holdings said on Wednesday that it has been notified of "significant, and potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company's accounts".
This significantly affected the company's cash position, with the firm saying it could lead to a "material change" in its overall financial position.
Mr Marsh was later suspended from his role and accountancy giant PwC drafted in to look through the company's books.
Mr Johnson, a serial entrepreneur, is the largest shareholder in Patisserie Holdings, and had a 37 per cent stake in the business ahead of the rescue deal.
It had been feared that the company could go into administration as soon as this week, with advisers at PwC thought to be on stand-by for a collapse.
Mr Johnson said: "We are going to cease new openings for a period and focus on making the most of what we have, we are going to stabilise our relations with suppliers, landlords, etc., we're going to beef up our systems and controls.
"Obviously we are going to make some additions to the senior leadership, particularly in finance."
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Directors said that initial investigation showed that historical statements on the cash position of the company were misstated and subject to fraudulent activity and accounting irregularities, directors said.
The Serious Fraud Office has now opened a criminal investigation.
Patisserie Holdings - which owns additional brands such as Druckers, Philpotts and Baker & Spice - trades from more than 200 stores and also has a partnership with Sainsbury's, with branded counters present in the supermarket.