Patisserie Holdings has revealed that 71 outlets will be closing, due to the business being unable to extend its bank facilities amid allegations of fraud.
Last week, the bakery chain revealed it had discovered “thousands of false entries into the company’s ledgers” and that “the misstatement of its accounts was extensive, involving very significant manipulation of the balance sheet and profit and loss accounts”.
It, therefore, expected cash flow and profitability to be materially below what it announced before the accounting hole became apparent.
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, said parent company Patisserie Holdings Plc.
Subsequently, 902 people will lose their jobs due to the closure of 27 Patisserie Valerie stores, 19 Drucker’s and 25 Patisserie Valerie concessions.
Chairman, Luke Johnson has had an extended £3 million unsecured, interest-free loan to ensure that January wages are paid to all staff working in the ongoing business.
The Chief Executive of Patisserie Holdings, Steve Francis, said the administration was a “genuinely positive development” and he “would rather have 2,000 fully employed staff than 3,000 with no future.”
Moving forward, Patisserie Holdings will continue business as usual at the remaining 122 outlets.