Former café chain boss thought of emigrating over financial crisis
Luke Johnson, the former chairman of Birmingham-based bakery chain Patisserie Valerie, said he considered emigrating when the company was plunged into a catastrophic financial crisis in October.
Patisserie Valerie was a respected stock market-listed business worth £450m at the time, before it revealed serious accounting irregularities. The majority of Patisserie Valerie has since been sold to a private equity firm, and administrators KPMG’s latest report says the company falsely claimed to have £54m in cash.
Johnson made the comments in his column for The Times and said he feared becoming “a pariah in the business world”.
The crisis sparked off a sequence of increasingly desperate measures – its shares were suspended, finance director Chris Marsh was arrested and left, chief executive Paul May departed, £10m emergency funding was put in – that ultimately failed to save the retailer.
“If I was arrogant at times before, my ego has taken quite a battering since,” Mr Johnson said in his column. “In business, we rely on honesty from those around us and systems designed to prevent misbehaviour.”
On 14 February 2019, Patisserie Valerie announced their administrators, KPMG, concluded an agreement for a management buyout funded by Causeway Capital Partners to acquire the assets and business of Patisserie Valerie from administration for a total of £13m.
Johnson, who was the largest shareholder in the chain, said he blamed part of the company’s failure on the industry becoming tougher to operate in, including having to pay higher wages and the increasing cost of ingredients.
The accounting black hole at Patisserie Valerie was found to be £94m in March, more than double a previous estimate, according to a report by KPMG.