Patisserie Valerie rescue saves 2,000 jobs

Patisserie Valerie is being bought out of administration in a deal that will save nearly 2,000 jobs.

The management team at the coffee and cake chain has secured backing from investment firm Causeway Capital to take over 96 shops.

Sister brand Philpotts has also been sold in a separate deal, saving a further 21 stores.

Collectively the chains fetched £13m - a fraction of what the group was once worth.

Patisserie Valerie's parent company, Patisserie Holdings, collapsed in January following an accounting scandal.

Patisserie Valerie's chief executive, Steve Francis, who is leading the management team buy-out, said the move would end "a disruptive period of uncertainty for the business" and provide the foundation for "an exciting future".

Matt Scaife, a partner at Dublin-based Causeway Capital, said Patisserie Valerie was a "much loved" heritage brand that his firm looked forward to helping return to growth.

Luke Johnson, until recently the firm's chairman and biggest shareholder, said: "While I'm naturally deeply disappointed at the events that led us to this point, I wish the company well."

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The entrepreneur, whose stake in the group was worth £165m back in October, will no longer be involved in the business.

Mr Francis told the Financial Times that he and other managers would own "more than the usual 10% [of Patisserie Valerie], but nowhere near control".

Another subsidiary, Baker & Spice, is still seeking a buyer but Patisserie Holdings said there had been "strong interest".

Patisserie Valerie was plunged into crisis in October when accounting irregularities were uncovered. It hired KPMG to try to salvage the brand which dates back nearly 100 years.

KPMG closed 70 outlets, with the loss of 920 jobs. Restructuring talks broke down in January, leaving no option but administration.

The Serious Fraud Office is carrying out a criminal investigation into Patisserie Valerie and finance director Chris Marsh was arrested and released on bail after having been suspended by the company.

Also under investigation, by the Financial Reporting Council, are former Patisserie Valerie auditors Grant Thornton.

The first Patisserie Valerie opened in Soho in 1926, established by Belgian husband and wife team Theo and Esther Vermeirsch. Esther, born Esther van Gyseghem, became known as Madame Valerie. The chain expanded rapidly across the UK after entrepreneur Luke Johnson invested in the brand in 2006.