Jamie Oliver is quite literally a household name in such that millions of households around the world carry his bestselling cookbooks, including Jamie’s 30-Minute Meals, Jamie’s Comfort Food, and Everyday Super Food, to name just a few.
He is even more recognizable as a television staple with hit cooking shows like Jamie at Home and Jamie Oliver’s Food Revolution. All these, plus his chain of Italian restaurants, makes it not at all surprising, therefore, that the popular celebrity chef is worth a whopping £150 million.
However, trouble seems to be brewing in paradise as it has come to light that Jamie and his Italian food empire is about to come crashing down due to debt. It started when Mark Smith, owner of the American Craft Beer Company, a supplier for Jamie’s Diner in Soho, blasted Jamie on Twitter for allegedly reneging on a £1,000 payable.
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As it turns out, this was just the tip of the iceberg. As of this writing, Jamie’s huge Italian restaurant chain is actually in the red for a whopping £71.5 million. The company reportedly owes HSBC £30.2 million in loans and overdrafts. Not only that, it owes another £41.3 million to suppliers, landlords, and the taxman. Even the staff is owed £2.2 million.
The TV star has reportedly approached the company’s landlords to cut rent for some of his underperforming restaurants. Although some have agreed to a rent cut of as much as 30 percent, it has barely made a dent in the total debt. As a result, 12 of its 37 restaurants in the United Kingdom are set to close, including those found in the areas of Harrogate, Bath, Bristol, Kingston, Greenwich, Piccadilly, Bluewater, St Albans, Chelmsford, and Reading, leaving the company with 25 restaurants in the United Kingdom and another 28 worldwide. He also has two restaurants under the Barbecoa brand that is currently on the market.
This is, indeed, a massive blow to the celebrity chef’s legacy. However, it is an even bigger blow to the 450 employees whose jobs are about to be lost.
Suppliers are also feeling the crunch. Balthazar Wholesale Bakery is reportedly owed £133,000; Camden Town Brewery, £41,000; and £263,000 for Daily Fish Supplies, to name a few. Although other suppliers are owed smaller amounts, most of these are small businesses that rely heavily on cash flow so many are struggling to keep their heads above the water.
Despite this financial quandary, the Olivers’ personal assets, all £150 million of them, are not at all in any danger. Jamie has reportedly put £3 million of his own money to help out the company, while investors have infused another £6.5 million.
The company has since filed for a Company Voluntary Arrangement (CVA), which, under the United Kingdom insolvency law, allows an insolvent company to pay its creditors over an agreed fixed period of time while, at the same time, being able to continue operating and trading. The legal filing cited “underinvestment, unsuitable new locations and high costs.”
The official statement released by the corporate states that they were overwhelmed with all the guidance and support they got from their creditors when they proposed to reshape and re-structure the famous Italian restaurant. They went on to say that they still have a strong brand presence and will endeavour to shift all their focus to deliver great levels of service, taste and the ‘Jamie Oliver’ experience which their loyal customers deserved. They would also be working towards ensuring that the company and estate is business-ready and aligned to the current trade scenarios, while feeling confident that the new business would bring forth strong growth and profitability opportunities.
A company spokesperson added that the CVA ensures that the restaurants staff and suppliers will get paid and hence, 1,800 jobs will be secured.
Simon Bonney of Quantuma LLP, specialists in the recovery and restructuring of companies, is quick to add that Jamie’s company is only one of many food and beverage companies that have proposed a CVA, due to having multiple sites that they are unable to afford as some sites fail to convert into profitable locations. However, many CVAs fail, generally because they were not planned out well.
Only time will tell, whether Jamie’s CVA will successfully take his company out of the debt or not. This needs more than one of his famed kitchen miracles to get out of.