Patisserie Valerie saved by private equity buyout from administration

James Sillars, business reporter

Patisserie Valerie has been bought out of administration after alleged fraud tipped it to collapse last month.

Irish-based Causeway Capital Partners said it had bought a "heritage brand" through its deal with administrators - supported by members of the chain's management team.

The new owners said they hoped to keep all 96 sites open.

Administrator KPMG later confirmed it had agreed the separate sale of one of parent firm Patisserie Holdings' other brands, Philpotts, which has 21 outlets to retail specialist A F Blakemore - the company behind 280 Spar convenience stores.

It is hoped the sales will collectively save 2,000 jobs.

Patisserie Holdings called in administrators on 22 January after the failure of talks with banks.

It had been attempting to secure extra funds to plug a black hole in its finances which, it said, was worse than first thought and the result of alleged manipulation of its accounts.

Its chairman at the time, Luke Johnson, had earlier pumped in more money himself and overseen the sale of new shares in an attempt to safeguard its future.

A police fraud investigation is continuing while regulators are examining oversight of the company's accounts by audit firm Grant Thornton.

A total of 70 stores were immediately shuttered by KPMG on the company's collapse - leaving more than 900 staff out of work.

There were several bids for Patisserie Valerie, including one from Sports Direct and House of Fraser tycoon Mike Ashley.

It was confirmed on Thursday the new owners of Patisserie Valerie and Philpotts had paid a total of £10m - with the potential for £3m extra in future - and that the Patisserie Holdings name would be cancelled on 25 February.

Causeway Capital's Matt Scaife signalled the Patisserie Valerie name would remain.

He said: of its deal: "Patisserie Valerie is [a] heritage brand, much loved by its loyal customers.

"This investment should mark the end of a turbulent period for customers and suppliers alike."

Steve Francis, who was brought in as chief executive to lead a turnaround late last year, is to remain as CEO.

He said: "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. "