Despite opening new restaurants this winter in south east Asia TV chef Jamie Oliver won’t have to pay most of the £83m in debts from his failed Jamie’s Italian outlets.
Administrators KPMG said there would a shortfall meaning the 288 trade creditors such as food ingredient suppliers and even the cleaners will get next to nothing or indeed nothing. They include window cleaners who are owed £90, while the cleaners are left with unpaid invoices of £4,471 and the distribution firm Brakes is owed an eye-watering £850,000.
While staff should get paid eventually the landlords such as councils and shopping centres are unlikely to be paid despite Jamie Oliver being thought to be worth around £100m due to his TV and publishing work. His chain of Italian restaurants crashed last May but he still operates 70 restaurants abroad and plans to open more this year under the brand name of Jamie Oliver’s Kitchen.
Despite his clean-cut honest John persona Jamie Oliver has a history of financial irresponsibility. His empire closed 12 of its sites in 2018 under a Company Voluntary Arrangement (CVA) and he failed to pay the suppliers to his steak house Piccadilly Barbecoa when that crashed the same year. He formed a firm that bought out the steak house without having to pay the creditors of the old business. Last year all but three of the remaining Italian restaurants closed throwing 1,000 people out of work leaving the ones at Gatwick airport open. Ironically because Gatwick were owed over £1m in rent when the chain collapsed.
There is some poetic justice in the former Jamie’s Italian restaurant in Guildford, Surrey, as it is set to become a McDonalds.
Restaurants have been closing at the rate of more than 15 a week as the public tighten their belts and habits change. It’s led to a 25% rise in restaurant insolvencies year on year as the sector takes a hit in straightened economic times.
Julie Palmer, partner at Begbies Traynor Begbies, said that it’s not just belt tightening that is hitting the casual dining sector.
She said: “A tightening of consumer’s belts has not helped as disposable income has decreased, while the rise of courier services such as Uber Eats and Just Eat is giving cheaper, more convenient options delivered straight to the door.”
Sophie Witts writing in Big Hospitality said in London landlords are increasingly nervous about offering long leases to restaurants due to the number of closures. She also highlighted the rise of the pop-up restaurant and an increasing number of so-called street food vendors as tastes and habits changed. Prezzo closed 94 outlets last March, Chimichanga axed 33 restaurants and Carluccio’s shut 34 of its restaurants following a CVA while Eat closed ten of its outlets last year although it did open a new one at Madrid airport.
Around 1,400 restaurants became insolvent in the UK in the last financial year and it’s not just the big chains who are suffering with the independents hit as well. It suggests a major shake-up in the industry is underway caused by economic uncertainty, changing habits and saturation.
A large number of restaurants and those in the hospitality industry are members of ICSM Credit which helps to protect them from collapsing firms said Ian Carrotte. He added: “We get news of problems from suppliers in the hospitality business who pass on credit intelligence about firms in trouble. It’s often the largest chains in hospitality that cause problems as people believe that because they are a famous name they are safe. That is clearly not the case in any industry which is why credit intelligence is vital.”
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.firstname.lastname@example.org on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers or simply subscribe to the FREE newsletter. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk