Patisserie Valerie has been rescued by an Irish investment firm in a deal that will save nearly 2,000 jobs.
Causeway Capital Partners has snapped up 96 of the cake chain’s sites. However, the deal does not include 27 outlets belonging to sister brands Philpotts and Baker & Spice.
Patisserie Valerie chief executive Steve Francis will continue to run the business.
About 2,000 staff will transfer to a new company which will honour their existing employment rights and benefits, Causeway said.
It marks a turning point for the company which collapsed into administration last month after uncovering a £40m hole in its accounts due to “significant, and potentially fraudulent, accounting irregularities”.
Administrator KPMG, which was appointed to run the struggling business on 22 January, closed 71 of its outlets, axing about 900 jobs. It kept 121 stores open in the hope of finding a buyer.
Mr Francis, said he was “delighted” by the deal. “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,” he said.
Causeway Capital’s Matt Scaife said: “This investment should mark the end of a turbulent period for customers and suppliers alike.”
The Dublin-based private equity group promised to “refresh and renew” the Patisserie Valerie brand.
Mike Ashley’s Sports Direct had been in the frame to snap up the cakes firm but later withdrew after complaining about its treatment during the bidding process. Sports Direct said it had not been allowed access to a data room, any financial information or meetings with management, leaving the company “at a serious disadvantage as a bidder”.
Costa Coffee, Caffè Nero and Leon had also reportedly shown interest.
In October, Patisserie Valerie's board discovered millions of pounds of secret overdrafts and warned that its financial position had been misstated.
The company’s largest shareholder, Luke Johnson, stepped in to invest £20m to prevent its collapse after directors said cash was required immediately.
But that wasn’t enough to prevent the administrators being called in after banks did not renew Patisserie Valerie’s lending facilities.
