Tuesday 16 July 2019

Causeway Capital eyes £10m online sales at UK chain

Brand value: A Patisserie Valerie store in London
Brand value: A Patisserie Valerie store in London
Growth plans: Causeway Capital’s Matt Scaife aims to expand the chain
John Mulligan

John Mulligan

CAUSEWAY Capital, the Irish private equity firm that rescued the troubled Patisserie Valerie firm in the UK earlier this year, expects to more than triple the chain's online sales to £10m (€11.1m) in the next two years, according to Matt Scaife, an executive at the Irish firm.

He said that Patisserie Valerie - rocked by an accounting scandal that saw it fall into administration in January - will probably have between 100 and 150 outlets. It currently has 96, including two in Ireland.

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"I suspect it's not going to be the size it once was," Mr Scaife told BBC Radio4. "About 100 to 150 stores feels about right. I think the exciting bit and the growth for the business is the online side, where we think we could triple the size of that business."

He said that Patisserie Valerie is currently generating about £3m (€3.3m) a year in online sales alone.

"We think there's an opportunity to take that to £10m over the next two years," he added.

Dublin-based Causeway Capital was founded in 2015 by investors including David Raethorne, the founder of software firm Helix Health.

Helix Health was bought by US investment group Eli Global in 2014 for €40m. Mr Scaife was the chief financial officer at Helix Health.

Patisserie Valerie, once a stock market-listed chain, was chaired by entrepreneur Luke Johnson, who also owned a 37pc stake in the business.

He loaned it £10m in an effort to prevent its collapse after a huge accounting fraud that covered up a near £100m hole in its balance sheet.

When it slid into administration, Mr Johnson's shareholding was wiped out. The chain had once been valued at £450m (€503m).

Administrators of the chain closed 71 outlets in January, which at the time left it with 122.

In cutting corners, the chain had even eliminated butter from its pastry.

"The first thing we did was to return the butter part in the puff pastry," said Mr Scaife.

"Patisserie Valerie is one of those brands that customers hold in a special place," he added.

"It's the kind of brand that people associate with childhood trips, or lunches with their loved ones."

Irish Independent

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