No Image

The Real Reason Jamie Oliver’s Restaurant Empire Is Collapsing


In May 2019, Jamie Oliver — one of the world’s
biggest celebrity chefs — saw his restaurant empire come crashing down. It’s been just over a decade since his Jamie’s
Italian brand of restaurants first launched in 2008. How could such a popular celebrity’s restaurant
empire fall so far, so fast? This massive 2019 closure isn’t the first
time Oliver has shuttered doors. In 2014, The Guardian reported on another
set of Oliver-inspired restaurants — Union Jacks — that were closing. The Guardian has also reported that Oliver’s
restaurants have been in trouble for a long, long time. In 2017, they released the numbers from the
previous year and revealed that while they had logged a $3 million profit in 2015, 2016
brought a $12.6 million loss. By 2018, The Telegraph was reporting some
of Jamie’s Italian’s 40+ locations were going to be closing. Oliver closed his chain of cookery shops,
Recipease, in 2015. According to The Guardian, the presses stopped
rolling on his self-titled food magazine, Jamie, in 2017. That’s a lot of stuff coming to a close. According to Bloomberg, the 2019 announcement
of insolvency came with the immediate closure of Jamie’s Italian, Barbecoa, and Fifteen
London restaurants. In 2018, there had been another announcement
— The Telegraph reported Jamie’s Italian was closing 12 locations and asking for their
rent to be lowered at another 11. They were struggling with massive debts, but
finding out just what was going on with the celebrity chef’s chain was difficult. Why? Because the hundreds of people who suddenly
found themselves unemployed were reportedly instructed to sign non-disclosure agreements
preventing them from discussing anything about the situation — and that included making
any comments about Oliver or his family. That sounds odd, at first, until you learn
that former staff members — many speaking anonymously — had come out to blame Oliver’s
brother-in-law, a top executive at Jamie Oliver Group, for the massive failures suffered by
the restaurants. It’s been a slow rollout of closures for Jamie’s
Italian over the course of a few years, and in January 2017, The Guardian reported that
he was going to be closing six locations. The reason? It was reported that the closures were coming
— in part — so Oliver could focus more on international endeavors, and it was also
because they were experiencing all kinds of, quote, “pressures and unknowns” following
the Brexit vote. To be fair, there are still a lot of unknowns
regarding Brexit in 2019, but according to ITV, a huge part of the problem Oliver’s restaurants
were facing was because of the collapse of the pound and an increase in the costs of
importing ingredients from Italy. In order to stay viable, each restaurant needed
to average about 3,000 covers a week – and those just didn’t make the cut. According to CNBC, Oliver saw his business
failing in 2018, and claimed he had learned some valuable lessons from it. Did he? Given the following year’s news that’s uncertain,
but he did say they had started to realize that not only did it take time to get something
as big and complicated as a restaurant right, but that it wasn’t going to happen just because
the person with the name on the door was famous. Jon Knight, CEO of the Jamie Oliver Restaurant
Group in 2017, cited the disconnect between Oliver’s image and his restaurants as a huge
problem. He explained, “The customer would go and buy Jamie’s latest
book, would sit at home and watch Jamie on Channel 4, but then he or she would go out
to eat at [competitor chain] Prezzo. That was our problem.” According to The New York Times, Oliver started
looking for a buyer to help save his restaurants in late 2018 – though a buyer didn’t materialize
as fast as he would have liked. Will Wright of KPMG, one of the administrators
brought in at the start of the closures, had this to say: “The current trading environment for companies
across the casual dining sector is as tough as I’ve ever seen. The directors at Jamie Oliver Restaurant Group
have worked tirelessly to stabilize the business against a backdrop of rising costs and brittle
consumer confidence.” But they were fighting an uphill battle. In early 2018, The Guardian got a peek at
court documents that detailed just how much Oliver’s restaurants were carrying in debt
– and it was no small amount. Jamie’s Italian alone had $90.8 million in
debt. Oliver’s representatives were quick to call
the debt “standard” for organizations, and stressed that there was no one out there actually
waiting for money. Documents, though, suggested the writing was
already on the wall. Sometimes, it takes failure to learn some
important lessons, and when he talked about his restaurant difficulties in 2018, Oliver
said he had learned a lot – and that he knew what he would go back and change. According to CNBC, one of those lessons was
that there was a danger in opening too many places too fast. Oliver said, “In the future, I might spend a bit more time
getting in second and getting it right.” Oliver empire exec Jon Knight added that the
mistake of, quote, “opening too many restaurants, too quickly, in the wrong places” was also
a huge miscalculation. According to Eater London, Knight explained
that they had overlooked two key factors when it came to getting in the right places – they
hadn’t picked locations with enough of a tourist draw or a university crowd. Here’s the thing about celebrity restaurants:
they rely heavily on the draw of the celebrity to get people in the door. The problem with Jamie Oliver? He has a tendency to make people very angry. Take the UK’s decision to put a tax on high-sugar
soft drinks, which he championed. “And I’ve took the liberty of putting in just
the five years of elementary school sugar just from milk.” But media outlets like the Spectator pointed
out his hypocrisy – he still sold cookbooks that included recipes containing very high-sugar
desserts, and he sold sugary drinks at his restaurants – just at a higher price than
other drinks. Oops? That’s just the start, and almost everyone
can find something in Oliver’s past to be angry about. There’s the time he united Spain in their
collective outrage over his “paella” recipe, which contained chorizo. “It trended for weeks. And death threats and all sorts because of
a bit of sausage.” And there was the time he was accused of cultural
appropriation with his “jerk rice.” The list goes on and on. So why would any of the people he’s angered
want to go eat at his restaurants? When Oliver’s chain faced insolvency in 2019,
it was the second time it had gotten that bad. The first time it happened – in September
2017 – Oliver was able to pull off a last-minute save by dumping almost $16.5 million of his
own money into the business. He did it just hours before they were going
to have to make the decision to pull the plug. According to The Guardian, Oliver was – at
the time – a bit mystified about what had gone wrong. He told the Financial Times, “We had simply run out of cash. […] And we hadn’t expected it. That is just not normal, in any business. You have quarterly meetings. You do board meetings. People supposed to manage that stuff should
manage that stuff.” In addition to that, it took another $46.8
million in loans and subsidies from other parts of Oliver’s business empire to shore
up the ailing restaurants, and Oliver described it as: “The perfect storm: rents, rates, the high
street declining, food costs, Brexit, increase in the minimum wage. There was a lot going on.” And it continued to go on. Should Oliver just stick to the cooking? Maybe, especially based on the fact that according
to The Guardian, he told Cannes Lions festival PR chief Richard Edelman this in 2015: “I worked out the other day, I took a little
review of my 17 years – we’ve done all right, I’ve sold a few books and we’ve made a few
quid – I realized that I think I wasted and f—ed up about 40 percent.” That “few quid” he’s made was, at the time,
estimated by the Sunday Times Rich List to be about $228 million, and Oliver says that
other 40 percent of endeavors that had failed were, quote, “quite painful.” He also noted that he wasn’t completely wasting
those failures, saying, “Did the mistakes not teach me powerful lessons? I’m trying to turn those mistakes into what
maybe you guys call R&D. What is the percentage of turnover that is
right for innovation. What is healthy? Is it 10 percent, 20 percent? Is 40 percent reckless?” The fall of Oliver’s restaurant empire is
pretty high-profile, but according to The Telegraph, he’s not alone in some of the problems
he’s facing: they’re hitting other restaurants, too – we just don’t hear about them as much. Numbers of restaurant closures, they say,
are up 35 percent from the previous year. In 2018, UK Hospitality reported that the
costs of running a restaurant had hit a new, 12-year high. Payroll costs were up and profit margins were
shrinking, all while food sales remained stagnant and drink sales took a nosedive. And on the other side of the pond, similar
trends are being seen in the United States. Steakhouses have been struggling under increased
cost of doing business, and it’s taking a toll on chain restaurants as well. “Business owners saying they’re getting killed
by increase in the minimum wage. They’ll go out of business without a surcharge.” When everyone talks about Jamie Oliver’s restaurant
empire falling, they tend to talk about Jamie Oliver. But it’s important to remember that many other
lives are being changed, too. According to Sky News, 2019’s insolvency means
that around 1,300 people are now without work. And that’s not the first time that hundreds
of people have lost their jobs or been laid off because of the financial difficulties
that developed around Oliver’s restaurants. When he closed 12 locations in 2018, The Telegraph
reported that more than 600 people saw their jobs disappear overnight. And that’s way more than they originally thought
would be lost – according to the Independent, it was first estimated that the closure and
restructuring plan was going to put around 200 jobs at risk. The resulting job loss is a tragedy that all
too often gets overlooked when news like this hits the headlines. At the end of the day, you don’t have to worry
about Oliver. Sure, he closed a huge number of restaurants,
but he’s fine. According to the BBC, not all of his restaurants
are going to be closing, and those that are under the control of franchisees – like his
international ventures – will stay open. The Guardian took a look at Oliver’s holdings,
and found that his restaurants are only a small portion of the empire he’s built. Jamie Oliver Holdings – which includes his
book and television ventures – is still pulling in millions, especially with help from his
best-selling cookbooks. He also has a huge stake in licensing agreements,
which is a division that basically oversees his partnership with various companies and
stores to put his name and image on merchandise. House Beautiful reported that he and his family
bought a new family home in Hampstead in 2015, estimated to be worth somewhere around $11.3
million. Hello! then later reported that they were
adding to their homes with the subsequent purchase of a 70-acre, 16th century mansion
in Essex, a country home worth around $7.6 million. So he’s not going anywhere soon. Check out one of our newest videos right here! Plus, even more Mashed videos about your favorite
stuff are coming soon. Subscribe to our YouTube channel and hit the
bell so you don’t miss a single one.

Leave a Comment

Your email address will not be published. Required fields are marked *