Page 19 - Patisserie Valerie Teaching Note

Q5 Why was Mike Ashley's Sport's Direct interested in

Patisserie Valerie?

A5 The founder of Sports Direct seemed intent on taking

over the UK's High Streets. He probably thought that

like his other acquisitions, companies bought from out

of administration, would be based on a fire-sale where

high levels of stock came with the purchase often with

the stock value out-weighing the purchase price.

Q6 For a future buyer, the Patisserie Valerie business is a

difficult one because it does not have traditional stock
that can be piled into a lorry and sold on.

A6 The primary stock for Patisserie Valerie is cakes which

is perishable.

Q7 Did Dunckley the CEO of Grant Thornton know what

business his company was in?

A7 No! The evidence given to the BEIS by Dunckley and

others in the industry would suggest that he did not

know what his company was supposed to be doing and

why it was doing it.

A8 Is the relationships between the big six accountancy
firms too cosy?

Q8 Yes! It is a virtual oligopolistic situation which begs the

question ‘quis custodiet Ipsos custodes?’ who will

guard the guardians? Certainly, it should not be

themselves.