Lees Foods has placed its loss-making subsidiary Patisserie UK into administration after failing to find a buyer for the business.

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The unit fell into the red after losing its major customer, Costa, which withdrew 25% of its business three weeks after Lees purchased the dessert maker in December 2007.


Costa told the group that it would source all of its baked dessert products elsewhere a year later, in December 2008.


At the time of the acquisition, Costa had accounted for 75% of the company’s turnover.


“It has not been possible to replace this level of sales in an appropriate time frame and consequently the company is in a loss making situation,” the company said yesterday (9 March).

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Patisserie UK’s unaudited results for the 12 months to 31 December showed a loss of GBP20,878, with net assets totalling GBP347,935.


David Hunter of Campbell Dallas has been appointed administrator for the group.


Hunter told just-food that Patisserie UK would first be offered as a going concern, although the likelihood of finding a buyer in the current climate was “slim”.


Meanwhile, Lees Foods was quick to emphasise that its other businesses, operating under the Lees of Scotland and Waverley Bakery brands, “are not affected and continue to trade in line with expectations”.


“At a time when the other parts of the group have been performing satisfactorily, it is with regret that the board had to arrive at this disappointing decision,” Raymond Miquel, chairman and MD, said.


Lees has indicated that it is taking legal action against the vendors of Rock Cake Ltd, the holding company of Patisserie UK.


“The group has served notice of a claim against the vendors of Rock Cake Ltd under the warranties contained within the acquisition agreement,” the company said.


Lees was unavailable for further comment as just-food went to press.