(Newswire.net — February 27, 2018) — While the media are preoccupied with the crisis that KFC is currently coping with, another “multimillion” catering company is having big problems. Namely, the restaurant chain belonging to the world’s most famous chef, Jamie Oliver, faces a major financial crisis.
Famous chef Jamie Oliver announced a week ago that he closed 12 restaurants across the UK, and cited “restructuring the company” as the reason. Jamie had 25 restaurants in the United Kingdom and 28 in the United States.
Financial experts, however, correctly anticipated the collapse due to non-investment, unattractive locations and high costs of Jamie’s restaurants.
Court documents appeared that show that Jamie’s Italian restaurant chain had debts of 71.5 million pounds (near $100 million USD). Jamie owes taxes and his suppliers, but also near $3mn to his staff.
In December last year, Jamie Oliver invested 3 million pounds (more than $4million) of his own money to try to keep the chain of restaurants running.
There are dozens of cheap places to eat that include every kind of kitchen you can imagine, and fresh pasta and ready-made sauces are sold at supermarkets, so the concept of a pricy Italian restaurant chain was not sustainable, the Independent UK reports.
“River Cafe”, where Jamie began to work in the kitchen, still serves simple Italian food made from the finest ingredients at astronomical prices. Rut Rogers, who owns and operates this restaurant, never wanted to open the chain, writes the Independent.
Do not feel sorry for Jamie, the Independent adds.
In 2016, Jamie Oliver made 7.3 million pounds from products and licensing, i.e. giving his name to the frying pans and kitchen accessories. He’s wealth is estimated at more than $200 million.
So, how did everything start to go downhill?
Warning signals emerged at the beginning of 2017, when Jamie’s Italian restaurant began to stumble because of intense competition and cost increases partly because of Brexit. Six restaurants were closed the same year.
The losses were caused mainly by the cost of closing restaurants and pricy lease costs for the location at Kings Cross, one of the most exclusive parts of London.
According to reports, the remaining branches of the chain exceeded the market and the brand “remained incredibly strong” due the lower cost of meals which led to more customers.
But Simon Blagden, chief executive of the restaurant, resigned in October along with Taro O’Neill, Finance Director, and Jamie Oliver announced that he would deal personally with restaurants rather than trust others, as was the case in previous years.
The crisis that hit Jamie’s Italian restaurant was followed by a series of business failures for Oliver, which destroyed 40 percent of his ventures and generated a loss of more than $120mn since 2014.
In 2015, Oliver closed the last cooking bowl “Recipes”, and in 2017 he closed the last of his four British themed restaurants, “Union Jacks.”