Paul May goes, but chairman Luke Johnson has weathered criticism and will stay

This article is more than 1 year old

This article is more than 1 year old

The chief executive of Patisserie Valerie has quit and been replaced by a turnaround specialist, weeks after shareholders backed a rescue deal for the company.

Paul May, who ran the cake shop’s parent company, Patisserie Holdings, resigned on Thursday with immediate effect, and has been replaced by Stephen Francis.

However, Luke Johnson, the company’s multimillionaire executive chairman, who faced criticism from investors during the stormy shareholder meeting earlier this month, will stay in his job.

The company said Francis had engineered four business turnarounds since 2005, of Tulip, a farming business and producer of pork; Danwood Group, a print services firm; Vion Food Group and Vita Group, a manufacturer of foam and plastics. He has also held a number of senior roles at Barclays Capital, PricewaterhouseCoopers and McKinsey.

Johnson said: “He has a strong track record of restoring value in turnaround situations, especially in the food industry, and the board looks forward to working with him in the revival of the business.”

To placate investors, Johnson has waived his £60,000 annual salary and pledged to give up some of his jobs at other companies as he tries to save the cake shop chain after an accounting scandal that brought it close to collapse. He sits on the board of at least 17 operating companies, more than half of which he chairs.

The firm managed to raise more than £25m in cash through discounted share placings and an emergency loan from Johnson, the company’s largest investor with a 37% stake.

Johnson, who made his name with the purchase and rapid expansion of Pizza Express, last month agreed to lend £20m of his own money to keep Patisserie Valerie afloat.

Its finance director, Chris Marsh, was arrested after the company revealed it had found “significant, and potentially fraudulent”, accounting irregularities that meant it was nearly £10m in debt instead of having £28m in the bank, as it had last reported.