LONDON • Jamie Oliver’s spouse set social media abuzz in December when she posted footage of their seven-bedroom home in London’s rarefied Hampstead.
The movie star chef has constructed a £150-million (S$280-million) fortune from a business spanning books, tv, endorsements and eating places.
But as followers admired his home, he was battling to stop the roof from caving in at Jamie’s Italian, the centrepiece of his restaurant division. In December, he pumped £three million of his cash into the business. Last month, the chain stated it might shut 12 of its 37 British branches.
Court paperwork confirmed money owed of £71.5 million and that workers have been owed £2.2 million.
When Jamie’s Italian opened its first department in 2008 in Oxford, prospects lined up exterior to pattern its rustic Italian staples with a “Jamie-style twist”.
The Guardian praised it for good meals, honest costs and enormous parts. The business expanded, peaking at greater than 40 branches.
So the place did all of it go fallacious? Warning indicators emerged early final yr when Jamie’s Italian blamed competitors and rising prices for the closure of six branches.
When accounts for 2016 have been revealed in October, the business had slumped to a £9.9-million pre-tax loss from a revenue of £2.four million a yr earlier.
The loss was precipitated primarily by the prices of department closures and handing again a lease for a website in King’s Cross the place Oliver had scrapped plans for a restaurant, pub and head workplace advanced.
The accounts stated the chain’s remaining branches have been outperforming the market and that the model “remains incredibly strong”.
But the restaurant business’ chief government left in October. The business was introduced below the wing of Mr Paul Hunt, husband of Oliver’s sister Anna-Marie. Oliver is now stated to be extra concerned with the restaurant business.
To some extent, the troubles at Jamie’s Italian replicate these affecting the market for informal eating.
Business boomed because the economic system picked up after the monetary disaster. But a glut of openings led to intense competitors, mixed with lease rises and better meals costs.
Mr Peter Martin, vice-president at food and drinks consultancy CGA, stated savvy operators corresponding to Nando’s and JD Wetherspoon have remained profitable by adapting to altering tastes.
The court docket paperwork for Jamie’s Italian paint an image of underinvestment, advanced menus and ill-judged department openings.
The disaster at Jamie’s Italian has adopted a sequence of business setbacks for Oliver, who by his personal admission has lost £90 million of his wealth since 2014 .
In 2015, he shut the final department of Recipease, his chain of cookery outlets. Last yr, he closed the final of his 4 British-themed Union Jacks eating places. And in October, his meals journal, Jamie, stopped publishing after nearly 10 years.
There could also be additional bother forward. He has put each branches of Barbecoa, his upmarket barbecue chain, up on the market.
Yet, away from his eating places, his business continues to make loads of cash. At Jamie Oliver Licensing, which covers his endorsements and vary of merchandise and tie-ups, pre-tax revenue rose to £7.three million from £7 million in 2016.
Profit at Jamie Oliver Holdings, which covers his media pursuits, rose to £5.four million from £1 million.
Oliver paid himself £10 million in dividends for the yr – £6 million from licensing and £four million from media. He has by no means taken cash from the restaurant business.
Mr Paolo Aversa, affiliate professor of technique at Cass Business School in London, stated Oliver’s business is basically a model constructed round his persona with a restaurant operation working alongside.
“You can argue that a company that sells an idea of better eating habits, healthy food and so on should have some kind of flagship business that reminds the customer where this all comes from,” Mr Aversa added.
“I think Jamie’s Italian reinforced the image and it still does to a certain extent. The question is: Is it worth the financial underperformance?”