Written by: Keith Tully
Reviewed: Thursday 11th October, 2018
The owners of the café chain business Patisserie Valerie is in the midst of a very serious financial crisis and on the brink of collapse after having received a winding up petition from HMRC.
The future for Patisserie Holdings and its main trading subsidiary Stonebeach is now decidedly uncertain with the tax authorities insisting that they owe approximately £1.14 million.
A series of statements issued in recent days by Patisserie Holdings have made clear that the company’s directors only this week became aware of “significant, and potentially fraudulent, accounting irregularities” in the context of its official accounts.
On Wednesday October 10th, it was announced that Patisserie Holdings had been issued with the HMRC’s winding up petition.
Less than 24 hours later, having looked into the matter and been advised by relevant financial and legal experts, the company revealed that there was a “material shortfall between the reported financial status and the current financial status of the business”.
That situation led the company’s board to conclude that “without an immediate injection of capital” there is “no scope for the business to continue trading in its current form”.
Patisserie Valerie was founded in 1926 with the opening of its first cake shop and café in the Soho area of London.
The company floated on the AIM stock exchange in April 2014 and has close to 200 stores around the UK.
Julie Palmer from the business recovery specialists Begbies Traynor - of which Real Business Rescue is part of - told BBC Radio Five Live:
“If you think that only back in May, this company was reporting having cash reserves of almost £30 million, it really is staggering that less than six months later, seemingly they’ve had problems paying a tax bill of just over a million pound, to the extent that HMRC have been led to issue a winding up petition.”
“And now we’re talking about potentially a £20 million black hole. That’s in the context of a company turning over less than £100 million, so this is a really material amount and what played out yesterday was really quite unbelievable.
“Everyone will now want to know why the company’s board and its shareholders didn’t know about the situation sooner. It smacks of mismanagement on a very significant scale with very serious questions about corporate governance to be asked.”