Patisserie Valerie: Sports Direct offers to buy collapsed bakery chain | UK News

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Sports Direct has made an offer to buy the collapsed bakery chain Patisserie Valerie out of administration.


Mike Ashley, the founder of Sports Direct, is hoping to add to his rapidly expanding high street empire by making an offer to acquire the business after it crashed into administration last month.

The 54-year-old, who owns Newcastle United Football Club, has already bought several struggling stores including House of Fraser, Evans Cycles and Agent Provocateur.

Earlier this week, Sunrise Records boss Doug Putman beat him in the battle for the collapsed music chain HMV.

Administrators to Patisserie Valerie previously said they received “a number of offers” for the business.

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Sports Direct founder Mike Ashley has offered to rescue the collapsed bakery chain

The cafe chain collapsed following the discovery of fraudulent activity in its accounts in October.

Trading in shares of Patisserie Holdings were subsequently suspended and the fallout saw its former finance director arrested and released amid a Serious Fraud Office investigation.

More than 70 stores have already closed resulting in 920 redundancies but 122 are still trading.

The chain, which specialises in hand-made cakes and continental breakfasts, indicated last month that the scale of the alleged fraud could be worse than first feared.

In a statement, the company revealed that analysis pointed to an “extensive” misstatement of accounts.

Cakes in the window of Patisserie Valerie in London
Image:
Cakes in the window of Patisserie Valerie in London

It added: “Among other manipulations, this involved thousands of false entries into the company’s ledgers.

“The initial indications from the work carried out to date is that the cashflow and profitability of the business has been overstated in the past and is materially below that announced in the trading update on 12 October 2018, which was based on limited work carried out over a 48-hour period.”

That work last year had resulted in estimated revenue and profits for the year to September being slashed to £120m and £12m respectively.

The company went into administration shortly after as it was unable to renew its bank loans and did not have enough funding to continue trading.

Chairman Luke Johnson extended an ongoing unsecured, interest free loan to help ensure January wages were paid to all staff in the continuing business.

However the loan did not cover payments for those made redundant by the recent closures, leaving many out of pocket.


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