AB Thinks  →  1st July 2019

Patisserie Valerie’s sticky problem

When your organisation is hitting the headlines for all the wrong reasons, the temptation for most leaders is to put their head well below the parapet. But Patisserie Valerie’s new Retail Managing Director, Paolo Peretti, is not like most leaders.

“You can’t be a successful leader by sitting behind a desk,” he told me before recording a special episode of The Internal Comms Podcast.

In June, five people were arrested in an ongoing investigation by the Serious Fraud Office into a multi-million black hole in Patisserie Valerie’s finances. The chain fell into administration in January, resulting in the closure of 71 stores and 920 redundancies. It was saved by Causeway Capital.

Matt Scaife, a partner at Causeway Capital talked to The Sunday Telegraph about discovering the full extent of Patisserie Valerie’s problems. Scaife described a business run into the ground. When the butter is removed from pastries, he told the newspaper, that’s a sure sign a business has “lost its soul”.

The job of putting the soul back into Patisserie Valerie lies with Paolo, who accepted the position of Retail MD in March having worked for more than 25 years in the food and beverage sector for brands such as Starbucks, Pret a Manger, KFC and Leon.

In our podcast interview, recorded in front of a live audience in central London, Paolo explained the value of listening to the frontline, the power of collaboration and the disadvantages of a command and control structure where employees are “not encouraged to think for themselves”.

Paolo has spent much of his first few months visiting stores, talking with colleagues and rebuilding trust. He’s seen first-hand the passion and loyalty that still exists within the business, despite its troubled past.

Getting out and about is clearly important to Paolo. “As a senior leader, I quickly learned hiding in corner was not going to get me very far,” he explained.

Unlike many leaders, Paolo blogs every day. These short, personal updates receive around 40,000 views a month and are intended to help employees and others understand more about his work and what’s on his mind. “It helps explain the how and why of our decision-making,” he adds.

In the podcast, Paolo speaks openly about a previous aspect of Patisserie Valerie’s culture that may have contributed to its difficulties. “There was no culture of talking about the performance of the business with those on the frontline,” he says. Even basic understanding and visibility around sales, cost of goods and wastage, for example, was lacking.

I ask him, as a leader, what he expects from an internal communications function. He pinpoints a few key areas: embedding technological solutions to reach the company’s far-flung audience; streamlining communications, particularly emails sent to those serving customers; and finding ways to make the corporate narrative genuinely engaging. “I’ve seen plenty of newsletters featuring bald blokes shaking hands over some deal. I was one of those blokes – and even I wasn’t interested!”

Is Paolo confident Patisserie Valerie has a future on today’s troubled UK high street? “The question I always ask myself is, if the brand didn’t exist today, would someone invent it? Unlike other café chains, Patisserie Valerie is a treat – an occasion. There is no one on the high street doing what we’re doing at the same scale. If we can do it well, we still have an edge.”