Paolo Peretti seems like he would almost rather customers don’t Google Patisserie Valerie. A quick search for the cafe chain brings up a list of results he describes as a “litany of woe”.
“The first 15 hits are things like ‘scandal’ and ‘jail’,” says Peretti, the former managing director of the Vital Ingredient chain who joined Patisserie Valerie in the same role in April. “A lot of people think we’re still owned by Luke Johnson or [Sports Direct boss] Mike Ashley, who are Brexiteers. If you go on Twitter and look at the amount of people who put us on a ‘banned’ list, you’d be amazed.”
It’s less than six months since Patisserie Valerie narrowly avoided collapse following the discovery of potential fraud in its accounts. Patisserie Holdings, its former parent company chaired by Johnson, fell in to administration in February before 96 of its sites were bought out of administration by Irish private equity firm Causeway Capital Partners, who reportedly paid just £5m for the business.
Since then its new owners have not been shy about sharing the problems they have inherited, with reports of broken ovens and leaking roofs. But Causeway is hoping for a return on its investment. “Although the brand is somewhat tarnished, we still feel there is a place for it on the high street,” says Peretti.
So can Patisserie Valerie be turned around?
Peretti insists there is a future for the business but is blunt about the challenge ahead. He describes Patisserie Valerie’s physical estate as “underinvested” and poorly maintained. The Hove café, one of 14 further sites which closed this month, needed £70-£80,000 investment to bring it up to scratch before Causeway could think about repainting the walls.
He adds that the chain “lost its identity”, branching out from patisserie to serve burgers and lasagne in a ‘brasserie’ format. “It was trying to appeal to everybody and I’m not sure succeeding with anyone.”
The company has also struggled to convince some customers its stores are even open following the blanket media coverage about its recent woes and closures. “A lot of people think we’re closed. Patisserie Valerie used to do a lot of business with vouchers or Groupon, but who’s going to buy a voucher for a business they think has gone bust?”
The issues have not just been structural. Peretti says one of the first steps in the turnaround has been to engage with staff, who he says have been left in the dark over the company’s financial straits.
“We had to pick up a fairly demoralised set of people who obviously had a bit of a rude awakening last October. We need to move away from negativity and work in a different way, because the brand needs to evolve if it’s got a chance of surviving.”
New vision and openings
Causeway is hoping to reposition Patisserie Valerie as a more ‘premium’ brand, recently closing 14 cafes in areas it felt didn’t fit that vision. This has also led to an investment in staff training and a move away from a mostly pre-frozen and microwaved menu in favour of a slimmed down offer that is easier to deliver, with a focus on breakfast, brunch, patisserie and snacks. More plant-based options, such as avocado on toast and a vegan breakfast, have been brought in, and there are plans for a range of gluten-free cakes.
The patisserie has also been reworked with higher quality ingredients, though the size has been reduced to keep prices the same. Peretti says customer feedback was that cakes were too large and lacking in flavour, with the cheesecake made to a cost and butter swapped for margarine. “People were sharing a dessert between two or leaving it on the plate, it was a whole hunk of cake,” he says.
Though the menu changes are getting “generally positive” feedback, Peretti admits getting all customers on board is a “work in progress”. “It’s quite a big change so is going to take a few weeks to bed in.”
Further updates are also being made to the in-store design, with a new look he describes as “belle epoque but contemporary” with more graphics and blues in the colour palate.
The first new-style store will open in Hammersmith shopping centre, previously the home of another Patisserie Valerie site, sometime before Christmas. Refurbishments of sites in high-footfall locations such as London’s Charing Cross, Euston and St Pancras will follow. The success of the newer elements will then be assessed before they are potentially rolled out across Patisserie Valerie’s remaining estate.
But will it be enough? It’s no secret that it’s tough on the high street, and chains including Jamie’s Italian, Byron and Carluccio’s have paid the price for over-expansion. While the patisserie market has room to grow, in London the group is contending with the rise of newer rivals such as Nordic bakery group Ole & Steen alongside established brands Caffe Concerto and Le Pain Quotidien, as well as the afternoon tea experiences at high-end hotels.
It also faces competition from expanding bakery group Gail’s Artisan Bakery, which is backed by Luke Johnson’s Risk Capital Partners, meaning that Johnson is now going head to head with the brand of which he used to chair.
Peretti says further expansion is not off the cards for the 75-strong chain, with Patisserie Valerie set to focus its attention outside London.
“We think there’s a few cities where we’re underrepresented,” says Peretti. “We have one store each in Manchester in Leeds, and none in Birmingham. The idea isn’t a huge expansion. There’s no grand ambition, it’s more about improving what we have than creating more stores.”
In today’s climate, where over expansion, often driven by private equity firms, has led to problems and even collapse, this appears to be a very sensible strategy.
