Following the sale of Patisserie Valerie to Causeway Capital Partners, Rhys Iley spoke to MCA deputy editor Georgi Gyton about why he is viewing it as a new chapter for the business, and what changes the management team will be putting in place, including store refreshes, longer opening hours, NPD, and a new app.
The sale of the beleaguered bakery chain Patisserie Valerie to Causeway Capital Partners yesterday marks the end of a sorry chapter in the brands history. While investigations will continue separately on the causes of its collapse, the management team that have been running the business for the past few months now have some clarity over what that business will actually look like going forward. Group commercial director Rhys Iley is certainly viewing 14 February as the start of a new chapter for the business and its staff.
The sale – for a total consideration of £13m, including the Patisserie Holdings sandwich business Philpotts – has been funded with investment from Causeway and the new management team, led by Steve Francis as chief executive. It sees all remaining 96 Patisserie Valerie shops (71 loss-making stores were closed when the business went into administration last month), remain open, saving approximately 2,000 jobs.
Former Starbucks EMEA retail and operations vice president Iley, joined the business in December 2018 at the same time as Jose Peralta, director of food production and supply.
“We all joined after the well documented problems were highlighted. We fell in love with the business, and saw real potential for it,” Iley told MCA. He admitted that the brand had not been loved – not by management anyway. “The story had been all about opening new stores, and there hadn’t been any product development for years,” he said. “Today we are on a new footing, with Causeway backing management’s plans and we look forward to rebuilding the business.”
He was keen to point out that this isn’t a story about the death of the British high street, or about how a business had become irrelevant to the consumer. “Our underlying sales have remained very good. There is good customer loyalty and we are still doing millions of pounds of year through web sales every year; it’s a really good business,” he said. Its loyal customers have been cited as a huge asset in the sales process, with Causeway Capital’s Matt Scaife describing Patisserie Valerie as a much loved heritage brand.
New product development and investment in the brand may have gone by the wayside, but this is something the business is keen to address. It wants to make NPD across its food and beverage offering “the lifeblood of the business”, explained Iley. Its 10-strong range of Valentine’s Day products, which debuted at the weekend, were the first additions to the range in about three years, he said.
In addition there will be a focus on its online and social channels, particularly around the handmade nature of what the business does, with a new loyalty app due to launch in the spring, and plans to add payment functionality in time.
On top of that its existing stores are set to undergo a refresh. It will not be a completely new look but is more about bringing the stores up to date, with an element of modernisation. “We know we have to refresh what happens in stores – they have not been invested in, so we know we’ve got a job to do on that and it’s something we’ll get on to during the course of this year,” he said. The focus will not be on opening lots of new stores. “We want to really stabilise the business, become really famous for what we do, and do it to a high quality and we’ll get the business back to where it needs to be, but it is going to take us time. This is very much a journey that we are going to go on, because it just hasn’t had the investment it needed to for many years.”
Its current customer demographic is made up of a very loyal student population – particularly international students from the Far East, mums with kids and older people coming in for a treat. “We want to maximise our strengths, but we recognise that over time we need to attract a younger customer,” he said. Hence the launch of the app, among other things. Iley said they are purchasing goods online, but are less likely to come into one of their cafes, so the business needs to remedy this.
It has also been trialling earlier opening times at 87 of the 96 stores – with the exception of sites in shopping centres where there are operating restrictions – with sites opening at 7am instead of 9am. “We have seen a fantastic uplift in early morning coffees to take away and pastries. People just didn’t know they could come in and sit in and have a proper eggs benedict for breakfast, and they weren’t aware we had a food to go offering – so that has been a really good success for us,” he said. Adding that due to the extensive media coverage over the past few weeks it has also noticed a big uplift in sales of afternoon tea.
Iley said that while the senior management team is now fully formed, he was actively looking to hire a director of NPD as well as focusing more on the training and people side of the business. “We see the talent in our people and we need to support them to be the best they can,” he said.