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Gail’s Bakery sale to be delayed until after Brexit

An exit would have been lucrative for Patisserie Valerie chairman Luke Johnson.

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Undated handout of Luke Johnson, chairman of Patisserie Valerie (PA)

Undated handout of Luke Johnson, chairman of Patisserie Valerie (PA)

Undated handout of Luke Johnson, chairman of Patisserie Valerie (PA)

Businessman Luke Johnson, who was forced to inject emergency funding into Patisserie Valerie just days ago, is facing another headache as Brexit scuppers his plans to offload Gail’s Bakery.

Last year the chain was exploring options for fresh funding, including a possible sale which could have valued the company at as much as £200 million.

A change in ownership would have resulted in a bumper windfall for Mr Johnson, who backed a management buyout of Gail’s in 2011 through his vehicle Risk Capital Partners (RCP).

But the Press Association understands that plans to find a new owner for Gail’s parent Bread Holdings have now been put on hold until after the UK leaves the European Union.

Mr Johnson is an outspoken proponent of Britain leaving the EU.

Advisers at KPMG were reportedly brought in this time last year to explore an exit for RCP.

It was previously thought that an auction process would get under way this year, but this now looks unlikely as uncertainty around the result of Brexit negotiations proves a stumbling block.

The run-up to Brexit has already been challenging for many restaurant businesses, as the weaker pound pushed up food prices.

Prezzo, Byron, Jamie’s Italian and Carluccio’s have all slashed sites this year due to pressure from rising costs.

Mr Johnson is also the chair of Patisserie Valerie parent Patisserie Holdings, which last week had a near escape from collapse.

On Friday, Mr Johnson committed £20 million in loans to keep the business afloat after a black hole was discovered in its accounts.

Patisserie Holdings was at one point rumoured to be a potential buyer for Bread Holdings, however PA understands that the possibility was never seriously discussed.

Mr Johnson has exited various other leisure holdings over the past 12 months.

In March, BrewDog acquired the 14-site Draft House chain, of which Mr Johnson was also chairman.

Risk Capital’s shareholding in The Laine Pub Company was sold to Vine Acquisitions in May, and Mr Johnson offloaded his stake in 3Sixty Restaurants, the parent of Ego, in August.

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