Unlike Boris, PatVal boss Luke Johnson cannot have it both ways

Say what you like about Mr Johnson, he certainly knows that timing is all — and addressing questions about personal conduct is quite unnecessary if you are supported by a major newspaper. Indeed, the return of Luke Johnson — former boss of scandal-hit café chain Patisserie Valerie — as The Sunday Times’ business guru appears to have worked out very well. He could probably teach political namesake Boris a thing or two. After all, they have a lot in common. Both have tried to tell the public they can have their cake and eat it. And both seem to have adopted a rather cavalier attitude to business.

Johnson L returned to print with a somewhat self-pitying apologia for his cake chain’s £40m accounting hole on the very same day that the main media spotlight was on Johnson B — and his new claim that as prime minister he would withhold £39bn from a Brexit deal. Then, this Sunday, Johnson L’s column made no reference to news that five people had been arrested over alleged fraud at PatVal, while all the papers’ attention was focused on Johnson B’s row and reconciliation with his girlfriend.

Of course, the timing of the Luke Johnson articles will have been entirely beyond his control. But the content of them won’t. And, in this, they do seem quite artfully spun. He reveals he “may well be a witness in a serious criminal investigation” and so cannot answer questions about what went wrong at PatVal. He says: “I wasn’t the dominant force in the business. I have always felt that if you are part-time chairman then you mustn’t interfere excessively.” He also expresses disbelief at auditor Grant Thornton: “One of the most astonishing aspects . . . is the way in which it seems such an eminent firm had the wool pulled very comprehensively over its eyes.”

His investors might know the feeling. Luke Johnson’s title at PatVal was “executive chairman” — not just running board meetings, supposedly running the business. PatVal’s shares were sold on his “20 years” experience. He has said that on “big issues such as agreeing new sites, capital expenditure, making appointments, raising capital, investor relations, making acquisitions, I’d get involved”. And PwC investigators have indicated that the issues being looked at include capital expenditure on the refurbishment of PatVal sites. Not only that, Mr Johnson was a member of the audit committee that appointed Grant Thornton. What’s more, the idea that Mr Johnson cannot talk about what went wrong is undermined by PatVal’s new owners, Causeway Capital, being able to pinpoint it precisely: a business that was “seriously mismanaged” as it grew.

People familiar with the old operation speak of problems in management structure, a breakdown in the corporate culture, and decisions being taken behind closed doors. If an executive chairman is not responsible for this, then what is he responsible for? It sounds like Mr Johnson is trying to have it both ways. A phrase you might hear more of in coming months.

Green down, down under

Philip Green’s sorrows are arriving in battalions, writes Kate Burgess. The shouty billionaire has been fighting court claims in the US while taking on the landlords of his UK stores. He also owns more than a fifth of Aim-quoted MySale, the Aussie retailer that has put itself up for sale and mutters about delisting its shares after a few short years on London’s junior market.

MySale’s model — to hold flashsales in Oz of clobber that was end-of-season on the other side of the world — works better on paper than in reality. Its costs have been too high, it has had the wrong products in the wrong place, and it has been outmanoeuvred by rivals that can react to millisecond swings in fashion. Then, last year, the lossmaking group was blindsided by changes to Australia’s sales tax regime. In May, MySale flogged its UK website, prompting Mike Ashley, the sportswear billionaire, to sell the 5 per cent stake he took at the group’s float in 2014.

Now, MySale plans a strategic review to cut costs, streamline distribution, and hunker down in Oz. But that will cost money, as will repaying debt. An outright sale might be easier if it can find a buyer. However, MySale now has three entries in the Bumper Book of Numerical Cockups. The first was when it got the decimal point in the wrong place on its Aim debut, causing its shares to be mispriced. The second was when it warned on profit. The third was the tax misjudgment. Investors do not have much faith in the company managing its own fire sale: the shares have halved again to 3.34p — they were 226p when MySale floated and Sir Philip first emerged as holder of a 21.5 per cent stake. Poor Sir Phil.

Banker bet

Gerard Lyons, the pro-Brexit economist and former Boris Johnson adviser, now seems to be in the running for Bank of England governor. But Lombard thinks it should be someone with more foresight, ie the finance exec who last week bet on Lyons at 90-1.

matthew.vincent@ft.com

MySale: kate.burgess@ft.com