Luke Johnson has broken his silence on the decline of cake and coffee chain Patisserie Valerie, describing the downfall as “horribly rapid and unexpected”.
The investor described struggling after the alleged discovery of “significant, and potentially fraudulent, accounting irregularities”, at parent company Patisserie Holdings in October 2018. The chain fell into administration in January 2019 after rescue talks with banks failed, resulting in the closure of 71 stores and 920 redundancies.
An investigation into the firm’s former CFO, led by the Serious Fraud Office, is still ongoing. A separate investigation into the firm’s auditor Grant Thornton, led by the Financial Reporting Council, is also ongoing.
In his first column for the Sunday Times since the business failed, Johnson described the failure as having hit him “suddenly and acutely” as he stopped exercising and struggled to sleep – however he has since vowed to continue working on his career.
He added: “It’s taken me almost nine months to come to terms with what happened. I know that I was not dishonest. I was unaware of fraud. My life will always be influenced by Patisserie Holdings, but does that mean I should give up my 35-year career in business? I don’t think so.”
He went on to describe his optimism about the future of the company and the industry – a positive outlook that predated the fall of his firm and was allegedly backed up by the company’s internal financial reporting.
He said: “The hospitality industry had become tougher — the national living wage had been introduced, there was more competition, ingredient cost inflation, business rates had increased — but our numbers appeared to show that our business was resilient. I received solid weekly numbers, comprehensive monthly management accounts, and, of course, annual accounts that were given a clean bill of health by our auditors. If ever there were queries, I got satisfactory answers… In business, as in life, there are certain documents and facts you rely on. They might be audited accounts, bank balances, a passport or a qualification. If these are fake, you wonder what is real and what is not.”