Scandal-hit Patisserie Valerie has been bought out of administration by its new management team, backed by private equity funding.
The deal, bankrolled by Irish investment firm Causeway Capital, has saved 96 Patisserie Valerie stores and 2,000 jobs – and the company’s new leadership trio have wasted little time in drawing up their transformation plan.
Patisserie Valerie’s new chief executive, Steve Francis, has form in the food business. The turnaround specialist and former boss of pork processor Tulip took the reins from Paul May last November, barely a month after the discovery of “significant, and potentially fraudulent, accounting irregularities”.
He was joined at the top table in December by fellow Tulip alumnus Jose Peralta, who has taken on the role of group production director, and commercial director Rhys Iley, a former executive of Starbucks and Boots.
Speaking to Retail Week just hours after the deal was formally revealed by administrators KPMG, Iley revealed the ingredients that would be central to the team’s recipe for success.
Francis, Peralta and Iley will focus on modernising the Patisserie Valerie brand, reinvigorating the store experience, refreshing its product proposition and building online sales.
Iley, who has come out of what he called “semi-retirement” to take on the challenge, says: “We can see there is a real passion in the company and a real opportunity to grow the brand.
“The interest in the business was phenomenal, but we as a management team loved the business so much. And when we realised how passionate the people were in stores and in the bakeries, and that this was not a result of high street doom and gloom because sales were relatively stable, we thought ‘there is something here’.
“The job at hand now is to stabilise the business and look at all the opportunities we’ve got.”
“We want to bring the brand to life in a different way, which means slightly modernising it, but using the mystique of Valerie”
Rhys Iley, Patisserie Valerie
Top of the to-do list in their stabilisation efforts is work on the brand.
Iley admits Patisserie Valerie has to “become a bit more contemporary” but remain “true to our heritage” as a continental patisserie.
The business hand-makes all its products at a Birmingham bakery, but Iley says that is a story “we are not telling anyone about”.
He believes social media will be crucial in telling that story, and Patisserie Valerie’s people will be “the heroes” of that digital campaign.
“We want to bring the brand to life in a different way,” Iley explains, “which means slightly modernising it, but using the mystique of Valerie. Most people enjoy doing baking at home and we can be part of that.”
Taking back control
It’s a move that Iley insists the trio have no desire to reverse – leaving the retailers with voids to fill in-store.
“We need to be able to control our opening hours, we need to be able to control our offering,” Iley says.
“When you’re inside a department store you can’t be in control of the business in the way you want to be. You can’t be reliant on other people’s footfall.”
At its 96 remaining outlets, Iley and co are taking control of their destiny.
Iley says the business is “happy” with its 96 outlets, with no immediate plans to grow that estate. Instead, investment will be ploughed into its existing portfolio to improve sales.
Like-for-likes in its shops are already “better than the high street average”, Iley insists, but he admits that there is work to be done on “fixing the basics” in order to improve further.
He wants to create “a better customer experience” by introducing music into stores and installing more powerful Wi-Fi.
Opening hours have already changed in order to take a bigger slice of the growing breakfast-on-the-go market. Most of Patisserie Valerie’s stores previously opened for business at 9am, but that has shifted to 7am across the estate. Coffee sales are doing well as a result.
“People now know we’ve actually got a breakfast offering,” Iley says. “The morning trade has been fantastic.”
Patisserie Valerie will launch a vegan breakfast option next month to further boost its breakfast credentials, but that is not the only new product launch the new team have up their sleeves.
The retailer launched 10 new products ahead of Valentine’s Day – the first time in around three years that it had invested in creating new lines.
“We’ve got to get back into new product development across beverages, food and cakes,” Iley says.
“We should be the go-to business for your birthday cake, your wedding cake, for Easter, for Christmas – whatever it is. Whenever you need a cake you should be thinking about Patisserie Valerie and that’s where we want to get to in the next year.”
Its online business – already worth around £3m a year in sales – will be a central pillar of that drive.
Ecommerce is “growing like crazy”, according to Iley, although he refuses to be drawn on how big a business it could eventually become.
The new management team has plenty on their plate if they are to rebuild the Patisserie Valerie business in the wake of its accounting scandal. But once that work has gained traction, Iley does not rule out tying up with delivery partners, or returning to department stores – as long as they can “become great curators of product”.
Patisserie Valerie may not be off the menu for prospective retail partners just yet, and the new team are confident they have the ingredients for success.