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.

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