Jamie Oliver restaurant chain collapses into administration. Updated 28/5/19.
James Salmon, Director, 21/05/2019 – updated 28/5/19.
More than 1,000 jobs are at risk after the restaurant chain of celebrity chef Jamie Oliver collapsed into administration.
Jamie’s Italian has appointed KPMG as administrators, the company confirmed today, and as many as 1,300 jobs are expected to be affected by the insolvency process.
The move comes after the restaurant group closed 12 of its 37 Jamie’s Italian branches at the beginning of last year and shuttered six in 2017.
Celebrity chef Jamie Oliver has said he is “devastated”.
HSBC, which is the company’s main bank lender, is facing a multimillion pound loss if the restaurant chain collapses, Sky News reported.
The group, which includes the Jamie’s Italian chain, Barbecoa and Fifteen, may completely disappear.
Twenty two of the 25 restaurants in Jamie Oliver’s restaurant group have now closed.
Mr Oliver, who put in £4m cash this year, said: “I appreciate how difficult this is for everyone affected.”
Two Jamie’s Italian restaurants and Jamie Oliver’s Diner at Gatwick Airport will continue to trade in the short term while the administrators explore options for the outlets.
Jamie Oliver’s Fifteen Cornwall at Watergate Bay, which operates under a franchise, is unaffected. The international restaurants trading as Jamie’s Italian, Jamie’s Pizzeria and Jamie’s Deli will also continue to trade as normal.
“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,” said the administrators in a statement.
Administrators cite the “very difficult current trading environment” and lack of “suitable investment forthcoming” as key reasons behind the development, with joint administrator Will Wright saying that conditions in the restaurant sector are “as tough as I’ve ever seen.”
Oliver said:“I am deeply saddened by this outcome and would like to thank all of the staff and our suppliers who have put their hearts and souls into this business for over a decade. I appreciate how difficult this is for everyone affected.”
A Jamie Oliver Group spokesperson said: “The board of Jamie’s Italian Limited has appointed Will Wright and Mark Orton of KPMG to put its UK-based restaurant business into administration.
“Jamie Oliver Holdings, which operates Jamie Oliver Limited and Jamie Oliver Licensing Limited, as well as the international restaurant franchise business, Jamie’s Italian International Limited, will continue to trade as normal. Fifteen Cornwall, which operates under a franchise, is also unaffected.”
Mr Oliver tweeted that: “I’m devastated that our much-loved UK restaurants have gone into administration.”
And in a statement he added: “I would also like to thank all the customers who have enjoyed and supported us over the last decade, it’s been a real pleasure serving you.
“We launched Jamie’s Italian in 2008 with the intention of positively disrupting mid-market dining in the UK High Street, with great value and much higher quality ingredients, best-in-class animal welfare standards and an amazing team who shared my passion for great food and service. And we did exactly that.”
“Perfect storm” in restaurant sector sinks chain’s finances
The administration comes after company bosses endeavoured to restructure the chain’s finances last year, with administrators noting that the chain’s directors “worked tirelessly to stabilise the business against a backdrop of rising costs and brittle consumer confidence.”
Founder Jamie Oliver injected £12.6m into the Jamie’s Italian chain in 2017, and earlier this year made an additional £4m in funding available for the group, but acknowledged last year that a “perfect storm” of conditions had made it difficult for the business’ finances to stay strong, citing the combined impact of “rents, rates, the high street declining, food costs, Brexit, increase in the minimum wage.”
The group’s two Barbecoa restaurants entered into a “pre-pack” administration last year, with one of the sites subsequently closing down.
Oliver rejected rescue deal over loans – update 28/5/19
Oliver Gill in the Sunday Telegraph reports that Jamie Oliver rejected an offer from specialist turnaround fund Aurelius that would have rescued his restaurant empire.
The firm’s offer called for Mr Oliver to write off around £13m of loans, with it understood that HSBC was prepared to write off almost all its loans, totalling £37m.
The restaurant group elected to enter into administration instead, with a source telling the paper that executives at Jamie Oliver Group believed the rescue deal was not a sufficient guarantee of the long-term future of the chains.
Mr Gill notes that the restaurants earlier this year hired BDO and Alix Partners in a bid to attract new capital.
15 restaurants shut down each week
The news of the Jamie’s chain administration makes a significant addition to an ongoing trend of British high street restaurant chains falling into financial difficulty, amid a wider crisis for the UK high street.
Research from Deloitte indicates that 80 restaurants, bars and hotel businesses went into administration across England and Wales last year, with an additional 36 businesses entering into CVAs in order to restructure costs and cut down on longterm lease burdens.
Amongst these, dining chains Byron and Prezzo both entered into CVAs last year, with the latter closing 90 stores in 2018.
Meanwhile, major dining chains including Carluccio’s, Gaucho Group, Giraffe and Gourmet Burger Kitchen have all closed sites recently, as the high cost of business rates, wages and rent combine with market disruption from the rise of online takeaway apps and a decrease in consumer footfall.
Against this backdrop, many businesses are struggling to turn a profit – with research from UHY Hacker Young indicating that nearly half of the top 100 restaurant groups in the UK are now loss-making.
The challenge of poor trading conditions has continued to worsen into this year, with recent figures indicating that 15 restaurants were closed each week in the twelve months to March 2019.
Begbies Traynor shows UK companies are in significant financial distress
KPMG give Zombie company warning
Are you owed money by a restaurant?
With pressures on the high street it is essential that you stay on top of the credit limits you grant restaurants and watch carefully for any late payments.
You can’t just assume your customers can and will pay you, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
See the section below – About CPA.
Are you also at risk of collapsing?
If you are struggling like the Jamie Oliver chain, rather than shutting down, do you realise you may have a hidden source of capital within your business waiting to be activated?
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.
That compensation could be the cash rescue your business needed.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cashflow.
Don’t let your bankers control you, contact CPA today.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply to retailers like Select or small ones, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
Keep up to date with the latest news by following us on social media:-
How to overcome 25 of the most common excuses for non-payment
Discover how to improve your cashflow in 3 steps.
Read our blog – Debt collection agency
Read our Cash Flow Advice
Read about our overdue account recovery service
Read our blog – What is credit management?
Read our blog -What is a credit management company?
Read our blog -Credit Management that works!
Read our blog – How to select a debt collection agency
click to see read about our successes