Luke Johnson will see his reputation recover from Patisserie Valerie’s fraud scandal
Warren Buffett once said that “bad things aren’t obvious when times are good”.
It is a statement that rings painfully true in the case of Luke Johnson, who was riding high last year with a £250m fortune, when the bad things – an alleged long-term fraud of Patisserie Valerie accounts – were apparently far from obvious.
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Yet they are now. The embattled firm was finally sold today for £13m, falling in value from £450m just months ago. Such a crash will be tough to swallow for Johnson, who acquired the company in 2006 and in recent months has pumped much of his own wealth into the chain to ensure its survival.
But it is not just Johnson’s finances that have been tarnished by the multimillion pound black hole that was discovered in October. His reputation, too, took a serious knock.
One of the chief criticisms levelled at Johnson during the financial scandal of recent months is that his time had been spread too thinly. When the tycoon looked to ease shareholder frustration by pledging to focus more of his efforts on Patisserie Valerie, it emerged in November that he was still on the board of 30 companies.
Johnson had a weekly Sunday Times column too, which was dropped in the aftermath of the scandal – though not before it became a source of irony. Just before the fondue hit the fan, Johnson had filed a column entitled “A business beginner’s guide to tried and tested swindles”, which offered “an aide-memoire for those looking to spot the next fraud”.
Johnson may be down, but he is far from out. The dining guru has built up a fortune which tells a story far beyond the troubles of an artisan cafe chain. Go into a high street restaurant today and you might very well find that he has had a role in bringing about its success – Pizza Express, Strada, Giraffe, the list goes on.
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The entrepreneur’s investments in his own ventures has won the respect of shareholders, too. One told Morning Wire today that he was hoping Johnson would stay on at the cake chain after showing he had skin in the game, though his future at Patisserie Valerie is now looking doubtful.
Buffett also said that it can take "20 years to build a reputation and five minutes to ruin it". But those in business know that no entrepreneur enjoys a career free from contact with failure. Johnson made mistakes with Patisserie Valerie, and doubtless they will haunt him, but by the standards of other business chiefs who find themselves in the news for the wrong reasons, he's a thoughtful and intelligent individual whose reputation should recover.