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Tue 5th Nov 2013 - Breaking News - Patisserie Valerie signs Next deal
Patisserie Valerie signs deal to open within Next shops: Patisserie Valerie has signed a deal to open within Next stores in a trial involving three sites. It is the first time that Patisserie Valerie has taken a concession within a retail environment but if successful could lead to another route of expansion for the brand, which is owned by Luke Johnson’s Risk Capital Partners.  Sites have already opened within the Next in Cheltenham’s Gallagher Retail Park and Manchester Fort Shopping Centre. The opening within Cheltenham Next came as Patisserie Valerie also opened on Cheltenham High Street. Patisserie Valerie, which first opened in 1926 in Soho, has reported that Ebitda rose to £9.6m in the year to 30 September 2012, up from £8m the year before. Turnover rose to £49,511,423 from £40,482,648 the year before. Pre-tax profit stood at £5,895,285 compared to £4,595,649 in the prior year. The company, which has 1,500 staff, has reported it targets a cash payback in excess of 40% return and two-year payback on investment. At the start of this year, Patisserie Valerie chief executive Paul May told Propel: “A lot of retailers are looking at their space and thinking how they can make it generate income, and we’ve been talking to some fairly large companies about the possibility of opening concessions in their stores.” While May wouldn’t be drawn at the time into naming names or style of operator, he added: “We’re talking substantial stores with hundreds of units.” In an interview in The Sunday Times in August, Luke Johnson said: “My sort of investing tends to be at the higher-risk, higher-reward end. I like businesses where, under my ownership, I can see a doubling or trebling of the size.” Referring to Patisserie Valerie, he added: “In 2006 we bought it for £6m. This year, we should make operating profits of £12m. You don’t see that sort of success or growth by playing it safe. Risk involves the possibility of failure. Being able to hold your head up high and carry on, and not retreat and not give up is a part of business and part of life.” In March this year, Patisserie Valerie opened seven sites in a single weekend as part of a major push into transport hub locations. The brand opened in former Paul sites at a host of London train stations – Marylebone, Waterloo, Victoria, Euston, Paddington and two sites at St Pancras. These latest openings follow success at the company’s first train station site at King’s Cross. May told Propel at the time: “Considering (King’s Cross) is a small area, just 354 square foot, it’s producing a level of sales equivalent to a 1,500 square foot site. That’s because we’re doing a lot of takeaway, although there is some external seating available. Transport hubs have been something we’ve wanted to get into for some time. Our operations director came from a coffee chain and had good connections, which helped us get into Network Rail. (Jon Hassall joined Patisserie Valerie in October 2012 from AMT Coffee). Network Rail is challenging. Commercial specifications and negotiations are long-winded and it’s hard to get a decent length of term, but commercially we are happy and Network Rail is delighted with our performance at King’s Cross.” The company is set to open a second site under its new restaurant format, which aims to capture an evening trade, in Aberdeen after the launch of the first in Glasgow. May has indicated evening trade is building in Glasgow after a slow start.

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