Around 100 potential bidders expressed an interest in rescuing stricken cake retailer Patisserie Valerie ahead of crunch talks this week, though reports warn the chain could be broken up as a number of turnaround specialists declined to lodge formal bids.
The Times (£) reports that as many as 100 parties and individuals were in the running to buy the chain ahead of Friday’s deadline for bids.
However, both The Times and The Financial Times suggested the business looks likely to be broken up into smaller chunks, rather than sold as a going concern.
Both papers note retail turnaround specialists Rcapital, which rescued Little Chef, and Endless Capital did not lodge bids and nor did serial retail investor Mike Ashley.
Bidders for certain groups of stores are thought to include Coca-Cola owner Costa Coffee and Franco Manca owner Fulham Shore, while former Druckers café chain owner David Scott signalled his intend to bid for a substantial number of the chain’s stores plus the company’s bakery in Birmingham.
KPMG is considering formal offers ahead of meetings alongside the chain’s management team with bidders this week.
A source close to the process stressed that a wholesale sale of the business remained a possibility.
Potential bidders said a rescue plan had been complicated by the circumstances of the chain’s collapse, given the large-scale fraud and accounting misstatements discovered late last year has caused significant uncertainty around its current and historic trading position.
Patisserie Holdings went into administration almost two weeks ago after attempts to renew its banking facilities following the discovery of a £40m black hole in October failed.
KPMG confirmed the shuttering of 71 outlets, comprising 27 Patisserie Valerie stores, 19 stores under its Druckers café brand and 25 Patisserie Valerie concessions in Debenhams, Next and at motorway service areas, as well as the termination of a concession deal with Sainsbury’s, at a cost of 920 jobs.
It’s a quiet start to the week on the markets this morning, with no releases of note in the grocery retail or consumer goods industries.
The FTSE 100 has consolidated last week’s gains, opening up another 0.2% to 7,031.7pts.
This week in the City
The online supermarket will issue its full year results tomorrow morning after a year in which its share price has surged after signing a number of international supply partnerships.
Imperial Brands (IMB) will host its AGM on Wednesday.
Global catering firm Compass Group (CPG) will issue its first quarter sales numbers on Thursday ahead of its AGM, while meat producer and exporter Cranswick (CWK) will reveal its third quarter trading figures on the same day and Tate & Lyle (TATE) will issue a third quarter trading update.
Internationally Kellogg’s (K) will issue its full year results on Thursday, while Costo will update the market on its January 2019 sales.
Thursday will also bring half year results from French spirits group Pernod Ricard (RI), full year results from Philip Morris (PM) and a first quarter trading update from Tyson Foods.
In economic news, this week will see the release of the monthly Grocer Price Index supermarket inflation tracker, which has seen shelf prices dip into year-on-year decline over recent months.
Both the monthly BRC-KPMG Retail Sales figures for January and the Kantar Worldpanel and Nielsen grocery market share figures will be released tomorrow morning.
Thursday will see the latest Bank of England interest rate decision, with declining inflation driving talk of another rate rise over the coming months.
The UK’s preliminary fourth quarter of 2018 GDP figures will be released on Friday.