Jamie Oliver’s restaurant chain falls into administration
British celebrity chef Jamie Oliver’s restaurant chain has collapsed into administration, becoming the latest victim of a casual dining slump that has hit the UK high street.
The move, which comes just a year after the group used an insolvency procedure to close dozens of outlets at its Jamie’s Italian brand, will result in 1,000 immediate job losses.
“The group had recently undertaken a process to secure additional investment into the business and, since the beginning of this year, Jamie Oliver has made available additional funds of £4m to support the fundraising,” administrators KPMG said in a statement. “However, with no suitable investment forthcoming and in light of the very difficult current trading environment, the directors resolved to appoint administrators.”
All but three of the 25 eateries operated by Jamie Oliver Restaurant Group — including 23 Jamie’s Italian, Barbecoa and Fifteen in London’s Shoreditch — have closed.
Only the two Jamie’s Italian restaurants and the Jamie Oliver’s Diner at Gatwick airport will continue to trade in the short term while the administrators explore options for the site. The process will not affect the Fifteen restaurant in Cornwall, which is owned by the Cornwall Food Foundation, or the international operations, which are franchised.
“I’m devastated that our much-loved UK restaurants have gone into administration. I am deeply saddened by this outcome and would like to thank all of the people who have put their hearts and souls into this business over the years,” Mr Oliver said in a tweet.
KPMG said Mr Oliver’s holding company will ensure that all staff are paid up to the date the administrators were appointed. Normally, staff must submit a claim for wages owed by a business in administration.
Partner and joint administrator Will Wright said the current trading environment in the sector “is as tough as I’ve ever seen”.
“The directors at Jamie Oliver Restaurant Group have worked tirelessly to stabilise the business against a backdrop of rising costs and brittle consumer confidence,” he added.
The administration comes despite a heavy restructuring and an injection of £12.6m into Jamie’s Italian from Mr Oliver in 2017. Barbecoa, which operated two grilled meat restaurants in London, was pushed through a “pre-pack” administration last year that resulted in one of the outlets closing down.
Mr Oliver has since said he has no further resources to plough into the restaurants, despite a network estimated by some to be worth more than £200m. He started Jamie’s Italian in 2008 to generally positive reviews, but later admitted the company had opened too many branches and had failed to keep prices competitive.
Jamie’s is one of several casual dining brands to have run into financial difficulties. Gaucho Group closed 22 sites operated by sub-brand Cau while Carluccio’s shut 30 restaurants and Giraffe and Gourmet Burger Kitchen have also shut sites.
Chains that have already been through a restructuring are increasingly needing either more funds or more surgery; Byron Burgers, which also used a company voluntary arrangement to restructure its store estate last year, received a further £10m from its private equity backers this year. Some analysts have expressed doubts about trading at Prezzo, another Italian-themed chain that went through a CVA in 2018, closing 90 stores.
According to business services group Deloitte, 80 bar, restaurant and hotel businesses went into administration in England and Wales last year, with a further 36 resorting to CVAs to restructure their businesses.
The latest Market Growth Monitor, compiled by CGA and AlixPartners — which acted as supervisor for the Jamie’s Italian CVA — found that 15 restaurants closed each week in the year to March. Most were independent, but the monitor also pointed out that many towns, in the south of England particularly, were reaching “saturation point” in terms of chain-operated eateries.
Many such chains expanded aggressively, often under private equity ownership, but were then left with too much space in nonprime locations just as consumer spending came under pressure and diners tired of formulaic offerings.
They have also been affected by the growth of takeaway apps such as Deliveroo and Just Eat, and hit by the rapidly rising costs associated with restaurants, including minimum wages and business rates.
One leisure industry analyst said that along with the problems common across the sector, Jamie’s had “tried to be special out of 25 branches” which was not sustainable for a business fronted by a celebrity chef. “If you’re not going to be in the building regularly you’ve got to make sure your DNA is all over it, otherwise people question what they are paying a premium for.”
“Ultimately, punters decided that Jamie’s was more ordinary than special.”
In an interview with the Financial Times last year, Mr Oliver acknowledged that he had been taken aback by the speed with which the finances of his Italian restaurants had deteriorated.
““I honestly don’t know [what happened],” he said at the time. “I think that the senior management we had in place were trying to manage what they would call the perfect storm — rents, rates, the high street declining, food costs, Brexit, increase in the minimum wage. There was a lot going on.”
But he vigorously denied assertions that the problems had been exacerbated by the decision-making of Paul Hunt, the chief executive of the holding company for his business interests, who is also his brother-in-law.
Mr Oliver is no stranger to business failures, having previously admitted that two-fifths of his various ventures have not succeeded — including cookery shops, the British-themed Union Jacks restaurants and an eponymous food magazine.