Life is sweet for Patisserie as it reveals £33m market flotation

CAKE shop chain Patisserie Valerie is set to create jobs in Yorkshire by rolling out more stores after unveiling plans to raise £33m through a stock market flotation.

Patisserie Valerie chairman Luke Johnson, left, and chief executive Paul May believe the group has significant growth potential. Picture: Patrick Balls

Paul May, the company’s chief executive, said there were “great opportunities” in Yorkshire, where the company already has stores in York, Sheffield and Leeds.

The Yorkshire Post understands that Harrogate is one area of possible expansion.

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The business, which includes Druckers and Philpotts, believes it has significant growth potential, having developed from eight shops in 2006 to 138 today.

It will use the proceeds of the proposed share placing to pay down debt, while the listing will enable existing shareholders to secure up to £55m.

Entrepreneur and former Pizza Express chairman Luke Johnson is majority owner of the business after backing a management buyout in 2006.

He said the rapid progress made in recent years and the opportunities that lie ahead made it an “exciting time” for the company to join the stock market.

The group’s portfolio includes 89 stores under the Patisserie Valerie brand, as well as 22 under the Druckers name in the Midlands and North West of England and 23 from the recent acquisition of sandwich chain Philpotts.

There are three Patisserie Valerie stores in Leeds, and also outlets in York and Sheffield.

Leeds also has two Philpotts stores.

Mr May told The Yorkshire Post yesterday: “We have built this business during a recession. We have got a great business, and a great growth story.”

Mr May said he was passionate about giving more employment opportunities to young people.

He added: “I’ve always called our business, ‘an affordable treat’. Through the recession people still needed to go out.”

Its main bakery is in Birmingham, and it has a further six bakeries located at existing stores, with capacity to support up to a further 100 openings.

A further 12 stores are expected to open in this financial year, bringing the total for the year to September 30 to 20. New stores are typically profitable from the first month with average weekly sales of £14,000.

The first Patisserie Valerie cafe was opened on Frith Street in London’s Soho district in 1926 by Belgian-born Madame Valerie, whose vision was to introduce continental patisserie products to the UK.

For many years, Patisserie Valerie was run as a small group by the Scalzo family consisting of a partnership of three brothers –Enzo, Robert and Victor.

They acquired the existing store in Soho, which had since relocated to Old Compton Street, in 1987 and took the group to eight sites.

Victor Scalzo still remains a shareholder in the company and is employed as operations director of its deli business Baker & Spice.

The current management team is expected to continue to hold a majority interest following the listing on the AIM stock market.

Mr May added: “We have built a strong business around a portfolio of appealing brands supported by our own bakeries and logistics. Our stores combine high quality, value for money, affordable treats with efficient service in a visually appealing environment.

“We trade in flexible locations that attract consumers for breakfast, a casual lunch, a quiet meeting in the afternoon or a relaxing dinner. This flexibility drives all-day trading which benefits us even during the traditionally quieter mid-morning and mid-afternoon periods.

“With this favourable positioning across fragmented markets, we believe we are well-placed to continue to deliver strong organic growth, with additional opportunities for potentially attractive acquisitions of other, smaller branded groups”

Mr Johnson, the executive chairman of Patisserie Holdings, said: “Patisserie Holdings has a leading position in an attractive market, built around five differentiated brands.

“The management team has an excellent track record in the sector.”