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Patisserie Valerie rescue is not a piece of cake
14th Jan 2019
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Patisserie Valerie’s interim CFO has told MPs the troubled chain is still working through a mountain of unpaid invoices and “there remains much to do”.
Last October, Patisserie Valerie hit the headlines when it suspended its shares and its erstwhile CFO, Chris Marsh. The café chain revealed that it had uncovered accounting irregularities that had led it to significantly overstate its cash position.
Marsh left the business as a fraud probe into the company’s finances got under way. His departure was swiftly followed by Paul May, the then chief exec of Patisserie Holdings. May was replaced by Steve Francis, and Marsh’s role was filled by Nick Perrin in an interim capacity.
In a written response to Business, Energy and Industrial Strategy Committee chair, Rachel Reeves MP, Perrin wrote that this new executive team is making progress with Patisserie Holding’s stack of unpaid creditors, but it’s slow progress.
“This is a complex and time-consuming task,” Perrin told Reeves in the response. “We are gradually ensuring that overdue payments are made and that terms agreed with suppliers are adhered to, but there remains much to do to complete this task.
“The payment processes are getting back to normal and I would expect that it will be about six months before we will have representative data with which we can calculate the matters above.”
No reports published
Reeves’ original letter wanted to know why Patisserie Valerie had not published any reports on its payment practices and asked for information about its payment terms.
Perrin noted that he was unable to explain why the previous management had not published the reports and that Patisserie Valerie is currently unable to provide figures such as average time to pay invoices, payment terms or how many invoices are paid late.
The main reason, Perrin wrote, was “a large number of payments on account” that have been made, “making it impossible to state when any particular invoice was paid”.
But despite the sanguine tone of Perrin’s letter, the intrigue around Patisserie Valerie’s future seems to be far from over. Just today, the company announced that its non-executive director James Horler has resigned with immediate effect.
According to a statement from the firm on the London Stock Exchange this afternoon, Horler has resigned “with immediate effect in order to focus on his role as chief executive officer at another business”.
Meanwhile, the recriminations from Patisserie Valerie’s near collapse last year only seems to spreading outward. The Times reported that the FRC approved Grant Thornton’s audit of Patisserie Valerie’s accounts six months before the café chain revealed the £40m fraud, adding to a growing list of embarrassing oversights by the regulator.
Patisserie Valerie has since replaced Grant Thornton with RSM.