Patisserie Valerie admits supplier payment issues amidst fraud investigation

Patisserie Valerie admits supplier payment issues amidst fraud investigation

Interim CFO Nick Perrin said "It was identified that there are many creditors with a large backlog of unpaid invoices."

In an update on the Patisserie Valerie case, the cake shop has now admitted there were delays and other issues with supplier payments.

The chain was on the brink of collapse at the end of last year after accounting irregularities were discovered on its accounts in October.

Chair Luke Johnson, also former chair of Pizza Express, the Royal Society of Arts, and Channel 4, had to bail the chain out by flooding £20m into it. It currently continues to operate while under investigation for potential fraud. The Serious Fraud Office opened a criminal investigation into an unknown individual.

Now, in a letter to Rachel Reeves, chair of the Business, Energy and Industrial Strategy select committee, Nick Perrin, interim chief financial officer of Patisserie Valerie, said: “It was identified that there are many creditors with a large backlog of unpaid invoices.”

The letter was written in response to questions from Reeves’ committee about payment practices before the business’s almost-downfall last year.

Perrin added: “Significant funds were injected into the business to enable the group to bring payments up to date.”

This all came to light because some clients have complained about late payments in the past. At points this has even resulted in legal action to eventually secure the rightful payment.

It has also been revealed that, back in October, HMRC issued a winding up agreement against Stonebeach, the main operating subsidiary for the group but the petition was later dismissed.

The standard payment terms between Patisserie Valerie and suppliers were 45 days and the longest contract stated 60 days.

Perrin admitted he does not know why payment reports were not published when the previous management team were in office.

Shares in parent company Patisserie Holdings remain suspended while investigations by the Serious Fraud Office and the Financial Reporting Council (FRC) into the company and individuals continue.

Meanwhile Luke Johnson’s troubles continue as shares in the Brighton Pier Group have plummeted by 30 percent. According to City A.M., Johnson owns a 23.7% stake in the leisure company which operates Brighton Pier and other facilities.

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