One of the best-loved coffee shops on the high street looks to become the next casualty of changing shopping habits and the financial landscape as it was revealed that Patisserie Valerie had run up millions of pounds’ worth of debt in secret overdrafts.
Paul May, the chief executive, has resigned and left the company with immediate effect following the revelation of the huge financial pit, believed to total in the region of £20m, which has prompted calls for a rescue package to save the business.
Lee Johnson is the executive chairman of the troubled restaurant chain and stands to lose out personally from the scandal, as more than 60% of his own £260m wealth was tied up in shares for Patisserie Valerie before they were suspended last week.
May’s resignation came soon after the chief financial officer, Chris Marsh, was arrested and then later bailed pending investigation into the irregular accounting activities.
Lessons for All Businesses
There are lessons for all commercial catering companies from this as the Patisserie Valerie parent company considers legal action against their auditor, who did not flag the irregularities: transparency is key. The company’s portfolio also includes restaurant chains Garfunkel’s and Frankie & Benny’s.
Follow tips from The Balance Small Business when planning your own commercial kitchen and be sure to consult specialist catering equipment suppliers for the key pieces such as a Lincat LMR9 6 burner gas oven from https://www.247cateringsupplies.co.uk/lincat-slr6-silverlink-600-4-burner-gas-range-oven.
Know Your Strengths
Many people tend to be creative or logical or good with numbers or words. The most successful business owners understand they cannot do everything themselves, and they are also skilled at recognising strengths and delegating tasks. This might include outsourcing finances to an accountant and using independent auditors.
An accountant can save you time not only through doing the finance work on your behalf but also by being more efficient at it, though in the case of Patisserie Valerie, it seems the issues were far deeper. See choosing an accountant as an investment in your business and treat it seriously. Meet with several companies and get a feel for the person who will be best suited to working with you. Appointing someone who is suitably qualified will help minimise the risk to your business, though as the case of Patisserie Valerie shows, fraudulent activity can still happen.