Patisserie Holdings, owner of high-end café chain Patisserie Valerie, has revealed it cannot continue to trade without an emergency injection of capital.
In a statement to the London Stock Exchange, the firm said that after further investigation into its financial status “the board has reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business”.
The businesses director and advisers are now looking at ways to keep the business trading.
Patisserie Holdings suspended its shares in relation to an investigation into potential accounting irregularities and warned investors of possible fraud earlier this week, after it said it became aware of a petition by HMRC to wind up the business.
As a result of unpaid taxes of £1.14m, last month HMRC filed the petition against Stonebeach Ltd, the principal trading subsidiary of Patisserie Holdings, with a hearing date set for the end of October for a court order to liquidate the business and its assets.
The total Patisserie Valerie portfolio covers 290,00 sq ft across 156 locations, with 31 in the capital, according to Radius Data Exchange.
In terms of landlords, LaSalle Investment Management, Intu Properties and McArthurGlen UK would be most affected by any closures.
James Child, retail analyst at EG, said: “This latest casualty highlights the fracturing felt in the food and beverage sector. Many chains have felt the stresses of over-expansion from an opportunistic space-race in the mid 2010s, as a result of developers over-building leisure extensions up and down the UK and F&B chains obliging by expanding their portfolios.
“Competition and an oversupplied market have added to the economic pressures of business rates and tough trading conditions.
“We can expect to see more restaurateurs suffering throughout the rest of the year and especially into next. The spectre of Brexit and its effect on the labour market will also add to the trepidation felt across the sector.”
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