Sports Direct CEO Mike Ashley bids for Patisserie Valerie cafe chain

Bakery chain went into administration in January after discovery of £40m hole in its finances, which it blamed on ‘potentially fraudulent’ accounting irregularities

(Reuters)

Sports Direct founder Mike Ashley has signalled a move into the catering and hospitality business after making a bid for Patisserie Valerie.

The sports retailer confirmed in a statement to the stock exchange that an offer had been made to acquire the cafe chain, which went into administration last month after talks with banks failed to save it from bankruptcy.

Administrator KPMG, which was appointed to run the struggling business on 22 January, closed 71 of its outlets, axing around 900 jobs. It kept 122 stores open in the hope of finding a buyer.

Mr Ashley, who also owns Newcastle United, is hoping to add the company to his expanding high street empire, which also includes the department store House of Fraser, Evans Cycles and lingerie store Agent Provocateur. He recently missed out on the acquisition of HMV.

Patisserie Valerie, which specialises in hand-made cakes and continental breakfasts, collapsed following the discovery of “significant, and potentially fraudulent, accounting irregularities” in October.

Finance director Chris Marsh was arrested following suspension by the company after the £40m hole in was discovered. He later resigned along with chief executive Paul May.

Chairman Luke Johnson extended an ongoing unsecured, interest-free loan to help ensure January wages were paid to remaining staff.

Costa Coffee, Caffe Nero and Leon have also reportedly shown interest in purchasing Patisserie Valerie.