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Cake chain Patisserie Valerie has collapsed into administration, putting 2,800 jobs in the UK at risk.
The firm said discussions with its lenders HSBC and Barclays to extend a standstill agreement on its debts had come to nothing, leaving it with no option but to appoint KPMG as administrator.
Its parent company Patisserie Holdings has been grappling with the fallout of an accounting fraud.
It said this evening: “Patisserie Holdings plc announces today that, as a direct result of the significant fraud referred to in previous announcements, it has been unable to renew its bank facilities, and therefore regrettably the business does not have sufficient funding to meet its liabilities as they fall due.”
Patisserie Valerie trades from about 200 cafes.
Chairman Luke Johnson has extended an unsecured, interest-free loan to help ensure that the January wages are paid to all staff working in the ongoing business, the company added.
The loan will also assist the administrators in trading as many profitable stores as possible while a sale process is undertaken.
Last week, Patisserie revealed KPMG had been hired to carry out a review of all options following the accounting scandal which pushed it close to collapse last year.
It also unveiled the “devastating” extent of irregularities in its books, which included thousands of false entries into the company’s ledgers.
The firm said an initial investigation pointed to cashflow and profitability being worse than previously thought when the problem was first discovered in October.
The discovery of a black hole in the company’s accounts in October last year pushed it into a crisis which saw it almost cease trading.
A rescue plan was passed by shareholders in November, resulting in the issue of £15m worth of new shares.
- Press Association
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German carmaker Volkswagen posted another annual sales record in 2018 as new SUV models boosted deliveries and the company increased its share in China even as the market there shrank for the first time in years.
The maker of Volkswagen, Audi, Seat, Skoda and other brand name cars sold 10.83 million vehicles, beating its 2017 record of 10.74 million cars by 0.9%.
Marketing head Christian Dahlheim said increasing sales in a global passenger car market that contracted by 1.2% last year was “a great result”.
Mr Dahlheim said the company overcame bottlenecks in getting cars certified under new emission rules that took effect on September 1 in Europe. Those difficulties hurt sales in the following months in Europe.
The company overcame that with strong increases in South America and eastern Europe as well as Russia.
In the company’s largest single market, China, sales rose 0.5% even as the overall market shrank.
In 2017, Volkswagen contested the title of world’s biggest carmaker with the Renault-Nissan-Mitsubishi alliance.
The alliance said it was number one with 10.6 million vehicles sold and said Volkswagen inflated its tally by counting trucks. The alliance announces 2018 figures later this month.
Volkswagen no longer sets unit sales records as a primary business goal. Taking over the top spot in the global sales race was a target once set by former chief executive Martin Winterkorn, who lost his job in 2015 after the company was caught installing software that let cars cheat on emissions tests.
The company paid more than 27 billion euros (£24 billion) in fines and settlements.
Sport-utility vehicles rose from a 12.6% share of Volkswagen sales in 2014 to 23.2% last year.
SUVs carry higher prices and profit margins than older types of vehicles such as saloons and hatchbacks. The highest share was 43% in North America.
- Press Association
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Virgin Atlantic and Stobart Group have swooped on regional airline Flybe in a £2.2 million deal which will see the creation of a new airline group.
The companies, in conjunction with Cyrus Capital Partners, have agreed an offer of just 1p per share for Flybe, which put itself up for sale in November.
Under the plans, the airline will be combined with Stobart Air in a joint venture called Connect Airways.
Cyrus will own 40% of the new company, while Virgin and Stobart will take 30% apiece.
The three companies have committed to make a £20 million bridge available to support Flybe’s current operations, while an additional £80 million will be provided to the combined group.
Flybe chief executive Christine Ourmieres-Widener said the firm had been forced to seek a buyer due to higher fuel costs, currency fluctuations and Brexit uncertainty.
“We have been affected by all of these factors which have put pressure on short-term financial performance,” she said.
“At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows.
“By combining to form a larger, stronger group, we will be better placed to withstand these pressures. We aim to provide an even better service to our customers and secure the future for our people.”
- Press Association
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Debenhams has unveiled declining sales over Christmas, but said it is still on track to deliver on profit expectations.
The high street retailer saw like-for-like sales dip by 3.4% in the six weeks to January 5, weighed down by the UK where sales were 3.6% lower due to weaker footfall.
But the group defied predictions from the City that it would issue a profit warning over the period.
Digital sales rose 6% in the period, despite a slower start to the peak shopping season.
Chief executive Sergio Bucher said the results were the “best possible outcome” in an uncertain time for retailers.
The company warned that the UK trading environment is still “volatile”, with savvy consumers actively seeking out discounts.
This will result in some erosion of the retailer’s profit margin in the first half, after it slashed prices to keep up with competitors.
Mr Bucher said: “We responded to a significant increase in promotional activity in the market, particularly in key seasonal categories, in order to remain competitive for our customers.
“We have taken decisive steps to maintain rigorous cost and capital discipline, and I am grateful to my colleagues for their hard work as we maintain a rapid pace of change.”
Debenhams has embarked on a major strategic shift, including the shuttering of 50 outlets and the launch of a new store design concept.
The company said on Thursday that the new format stores had outperformed other sites, with the strongest sales increase at Stevenage.
- Press Association
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