Jamie Oliver’s UK Barbecoa Chain Goes Bust, While Jamie’s Italian Restructured

BusinessJamie Oliver's UK Barbecoa Chain Goes Bust, While Jamie's Italian Restructured

Jamie Oliver’s UK Barbecoa Chain Goes Bust, While Jamie’s Italian Restructured

Commentators are asking what went wrong with Jamie Oliver’s seemingly unstoppable success after two of his UK Barbecoa restaurants went into administration and Jamie’s Italian narrowly escaped the same fate.
Oliver’s two barbecue-focused restaurants Barbecoa Piccadilly and St Pauls went into administration this week, with the chef immediately buying back the St Paul’s outlet. Barbecoa Piccadilly only opened a year ago. 
Meanwhile, the celebrity chef’s Italian mid-market chain was recently on the verge of collapse, with debts of £71.5m, before it was restructured via a Company Voluntary Arrangement (CVA), an insolvency process, court documents revealed last week.
High court documents obtained by the UK-based Sun on Sunday newspaper show the firm owed £30.2m in loans and bank overdrafts. It also owed £41m in taxes, rent and payments to suppliers.

Debts ‘distorted’, says company

A company’s spokeswoman told the UK’s Guardian newspaper that the figure of £71.5m was a ‘distorted’ one, with £47m covered by loans from Jamie Oliver companies and HSBC bank, and that it was standard for restaurant businesses to owe cash to suppliers, staff and in taxes.
However, the decade-old UK-based Jamie’s Italian, which opened its first outlet in Oxford in 2008 to acclaim, recently announced it is to shut 12 of its 37 outlets. At its height, the chain boasted over 40 venues.
Accounts published in October last year show Jamie’s Italian made a £9.9m loss for 2016, compared with a £2.4m profit the previous year.
Oliver’s pizza chain Union Jacks closed in March last year. His magazine, Jamie, also stopped publishing in October after nine years.

Multi-millionaire ‘begged’ landlords to slash rental charges

Jamie Oliver, who with wife Jools is thought to be worth £150m, personally injected £3m of his own money into Jamie’s Italian after it experienced a tough 2017. Oliver, whose empire spans a media empire, licensing business and charitable foundation as well as his restaurants, is rumoured to have pleaded with landlords to slash rents after the chain lost £10m last year.
As part of the restructuring process, the CVA includes the negotiation of rent reductions with landlords.
In a statement, Jamie’s Italian said: “We are pleased to have received the overwhelming support from our creditors for our proposal to reshape Jamie’s Italian restaurants. The CVA approval ensures Jamie’s Italian’s great staff and suppliers can all get paid and has saved 1,800 jobs.
“We have a strong brand and are focused on continuing to deliver the levels of service, taste and the experience our loyal customers deserve.
“We are working hard to ensure that our estate is fit for the current trading environment and we feel confident that this newly shaped business will provide strong opportunities for growth and profitability.”

Jamie Oliver says ‘Brexit to blame’

While Oliver’s media and licensing arms continue to perform strongly, the mid-market restaurant sector in the UK is facing tough competition from the takeaway sector and rising prices, as well as pressure from Brexit, say analysts.
Last year Oliver blamed Britain’s decision to leave the EU for the closure of six Jamie’s Italian outlets. The firm has also been hit by a steep rise in business rates and poor customer reviews.
Italian chain Strada and burger outlet Byron’s have also announced closures.

Restaurant owners must ‘adapt to survive’, say analysts

The likes of Nando’s and JD Wetherspoon have succeeded for the long haul by adapting to consumers’ changing tastes, Peter Martin, vice-president at the food and drink consultancy CGA, told the Guardian.
“With this much choice in the market, customers will take it unless you stay fresh and relevant,” Martin says.
“When Jamie came on to the scene it was new and exciting. There were queues outside the Oxford branch and they were taking samples out for people to try. But the market has become more exciting generally and you have got more people doing that sort of thing.”

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