Patisserie Valerie, the British café chain that has found a potential fraud on its accounts, had used up £9.7m on two separate bank credit lines without the board’s knowledge. The revelation adds further confusion over the accounts of the UK high street chain, which shocked investors last week by admitting there had been “significant, and potentially fraudulent” irregularities (Financial Times). Luke Johnson, the chain’s executive chairman who saved the group from collapse on Friday after personally injecting £20m into the business, told The Sunday Times it had been “the most harrowing week of my life” and like a “nightmare” he was hoping to wake up from.
The company that owns Patisserie Valerie is considering taking legal action against its auditors for their alleged failure to spot a £40 million black hole in the upmarket café and cake shop operator’s finances (The Times £). Grant Thornton, which has been auditor to Patisserie Holdings since 2006, has faced questions over how it remained ignorant of what the chain described as “significant, potentially fraudulent, accounting irregularities” discovered last week (Daily Mail).
The boss of stricken chain Patisserie Valerie came under fire from City advisory groups for his controlling influence at the firm just months ahead of a crisis that engulfed it last week. Reports obtained by The Mail on Sunday show that Luke Johnson was told in January his 37 per cent shareholding conflicted with his other roles at the company, which include executive chairman and a key position on the audit committee.
Patisserie Valerie’s management snubbed a £30m deal that would have protected small investors, it has been revealed, as furious shareholders rounded on the company (Telegraph). Investment fund Crystal Amber was plotting a convertible debt deal to rescue the firm which would have meant investors would not have seen their stakes diluted by the emergency fund raise that offered up new shares at a huge discount.
Grimsby-based frozen food giant Young’s Seafood could be netted for as much as £200million after it emerged that the firm’s owners are in advanced sale talks (Daily Mail). Irish private equity firm CapVest, the owner of Jacob’s Cream Crackers, is the ‘preferred buyer’, City sources said. CapVest also owns honey maker Rowse and peas brand Batchelors.
Unilever’s bosses will this week face investors for the first time since the failed attempt to move the company’s headquarters from London to Rotterdam (The Sunday Times £). The FTSE 100 consumer goods maker, which was forced into an embarrassing U-turn over the relocation earlier this month after a backlash from leading institutional investors, is due to report results for the third quarter. However, its financial earnings are likely to be overshadowed by questions over the future of chief executive Paul Polman, finance director Graeme Pitkethly and chairman Marijn Dekkers.
Pressure on household budgets continued to hurt traditional retailers last month as fewer consumers hit the shops (The Times £). Visits to stores dropped by 1.7 per cent in September, having slipped 1.6 per cent in August, as consumers feel the pinch of sluggish wage growth and rising prices.
US retail giant Sears has filed for bankruptcy after succumbing to huge debts and losses (Sky News). The company, which is more than 100 years old, was once America’s largest retailer but has been battered by fierce competition and the rise of internet shopping. Sears, which still has 886 stores across the US, was left fighting for its life ahead of a key $134m (£102m) debt repayment due at the start of this week.
The discount retailer B&M is hunting for an acquisition to break into the French market, as chief executive Simon Arora sets about trying to turn the company into one of Europe’s largest players (The Sunday Times £). Arora has drawn up a list of targets in France and is understood to be holding talks with a local chain.
One of Britain’s most high-profile retail landlords has backed calls for higher taxes on online retailers to relieve the pressures of the “out of date” business rates regime on the country’s struggling high streets (Telegraph). Brian Bickell, chief executive of Carnaby Street owner Shaftesbury, called for a “level playing field” between shops and online shopping websites such as Amazon.
All flour is to be fortified with folic acid after ministers swung behind a plan that medical experts say will reduce the number of babies born in the UK with serious birth defects (The Guardian). The policy, which will be introduced within weeks, comes after ministers were convinced by their own advisers that it would reduce the risk of babies developing spina bifida and other conditions that involve severe disability or death.
Scientists have turned coffee waste into electricity for the first time, in research that could help farmers and curb pollution in the developing world (The Guardian). The coffee industry generates a huge amount of liquid waste during the process of turning the raw material of the tree – the coffee cherries – into the 9.5m tons of coffee the world produces each year.
“The coffee market is steaming and it is not only bearded hipsters who are queueing up for their skinny caramel macchiatos. Companies are racing to purchase coffee brands, retail chains and even pods,” writes Patrick Mathurin in the Financial Times.
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