23rd Jan 2019 17:01
LONDON (Alliance News) - Patisserie Holdings PLC on Wednesday said it has closed 71 of its stores the day after collapsing into administration.
The cake chain said it has closed a number of its loss making outlets, including 27 Patisserie Valerie stores and 19 Druckers stores. A further 25 of its concessions in Debenhams, Next, and motorway service areas were also closed.
Patisserie also closed its bakery in Spitalfields. In total, the closures have resulted in 920 redundancies.
In the meantime, the company's remaining 122 outlets will continue trading while administrators KPMG look for a buyer.
"Since our appointment less than 24 hours ago, we have been pleased with the level of interest we have received in the business, and so remain hopeful of achieving a positive outcome," said KPMG partner and joint administrator David Costley-Wood.
"In the meantime, we can reassure customers that across the remaining 122 stores, it is all but business as usual," he added.
On Tuesday, Patisserie said it had appointed KPMG as administrators as extensive fraud prevented it from renewing loans.
Chair Luke Johnson has extended an unsecured and interest-free GBP3.0 million loan to ensure January wages are paid to staff and to assist administrators in "trading as many profitable stores as possible while a sale process is undertaken".
The Patisserie Valerie cake shop owner found a GBP20 million black hole in its financial accounts in October and work carried out by its forensic accountants has since found "very significant manipulation of the balance sheet and profit and loss accounts".
At that time, the firm undertook a heavily discounted share issue which raised GBP15.7 million and Johnson loaned a further GBP20 million.
On Monday, Patisserie said it remained in talks with lenders to extend the standstill on its bank facilities past Friday. If this failed, HSBC Holdings PLC and Barclays PLC could demand repayment of GBP9.7 million of overdraft debt.
Moreover, the Sunday Times reported trading subsidiary Patisserie Valerie would likely collapse if emergency talks between Johnson and its lenders proved unsuccessful.
"As a direct result of the significant fraud referred to in previous announcements, it has been unable to renew its bank facilities, and therefore regrettably the business does not have sufficient funding to meet its liabilities as they fall due," Patisserie Holdings said.
Later on Tuesday, and "with mutual agreement", nominated adviser and broker Canaccord Genuity Ltd resigned.
"The company has no current intention of appointing a replacement nominated adviser," Patisserie Holdings said.
If no replacement is appointed, the cake company's shares will be cancelled from trading on the AIM market.
Patisserie Valerie shares have been suspended since October.