The future of two cake shops in Brighton and Hove looks assured after entrepreneur Luke Johnson arranged an emergency bail-out of Patisserie Valerie.
Mr Johnson, who owns the Palace Pier, is the chairman of the cake shop chain which teetered on the brink of insolvency after a potential multimillion-pound fraud came to light last week.
He lent £20 million to Patisserie Valerie, which has branches in Western Road, Hove, and East Street, Brighton.
Half of the money is reported to be an interest-free and fee-free loan while the rest was described as a bridging loan to ensure that the business could pay suppliers and staff.
Patisserie Valerie also raised £15.7 million by issuing 17 million shares at 50p, heavily discounted from their trading price of 429p before they were suspended last Wednesday (10 October).
The company said that it had found significant and possibly fraudulent accounting irregularities, later said to include two secret overdrafts for almost £10 million.
The company’s finance director Chris Marsh was suspended and later arrested. He has been released on bail without charge.
According to the Sunday Times yesterday (Sunday 14 October), Mr Johnson said: “I believe in the business as an economic entity so I don’t think it was a wholly emotional decision but I think there was a moral obligation.
”There were 2,800 jobs at stake, there was 12 years of effort I and colleagues had put into the business and the board was determined not to allow the business to go into administration.”
Mr Johnson said that he intended to scale back his other commitments to focus on Patisserie Valerie.
He said: “I can’t afford to get distracted. There was criticism I was stretched too thin – fair criticism.
“We’ve got to rebuild, we’ve got to hire new talent and we’ve got to restore confidence in the business among suppliers and landlords.
“We’ve got to do better all round. There’s a lot of work to be done.”
An interesting metaphor by Luke Johnson – “stretched too thin”. Perhaps this was subconcsiously inspired by baking/pizza activities? A shame he does not improve the food on the Palace Pier (and bring back the Theatre).
Perhaps they could try selling pizza at the Carnegie Library, Christopher?
The rescue package was organised in an impressively decisive and swift manner.
Try the hog roast. Or the stir fries at the end of the pier? Nice fresh stuff.