You might have heard that Jamie’s Italian restaurants chain went into administration on 21 May 2019. But why? What went wrong? This blog will briefly set out the where Jamie’s Italian chain started compared to its current position.
Jamie Oliver launched his first restaurant, Jamie’s Italian, in June 2008. Jamie Oliver launched the brand “with the intention of positively disrupting mid-market dining in the high street in the UK; with great value and much higher quality ingredients”. Since its launch, the brand increased to 42 restaurants in the UK and franchised in various countries; including Canada, UAE, Australia, Russia, Singapore and Hong Kong.
The restaurant chain is under the control of Jamie Oliver Restaurant Group Limited (‘Jamie’s Restaurant Group’); Jamie Oliver Restaurant Group Limited is a limited company incorporated in England and Wales.
In 2017, 6 of the 42 restaurants in the UK were closed, affecting 120 jobs. In January 2018, Jamie’s Restaurant Group entered into a Company Voluntary Agreement (CVA) seeking rent reductions on various sites. At this point, the Jamie’s Restaurant Group debts were approximately £71.5 million. Jamie’s Restaurant Group has now entered into administration.
Entertainment and books
Jamie Oliver is also known for his cooking TV programmes and cookery books. His first series being aired in 1999 and his first book being published in 2000
What is administration and what does this mean for Jamie’s Italian chain?
It has not yet been confirmed whether Jamie’s Italian restaurants have already closed their doors. However, it has been confirmed that 1,000 jobs at the chain are at risk.
KPMG were appointed as administrators and they confirmed their agreement with Jamie Oliver’s rationale behind the chain’s collapse; that running a chain of restaurants is a “tough trading environment”.
Some members of staff also commented about the chains collapse. It was said the size of the restaurants, voucher schemes, bad reviews and higher prices (compared to local competition) contributed to the chain’s demise.
Administration is an insolvency procedure which allows reorganisation of a company, or the sale (also known as realisation) of its assets for a period of time during which its creditors (which can include individuals/organisations that invested money in the chain – i.e. banks, investors etc) are prevented from taking action to enforce their claims against the company.
This means that during the administration process, the Restaurant Group’s creditors are prevented from suing the company. KPMG will now take over Jamie Italian’s chain to achieve one of the following objectives:
- Rescue the Restaurant Group;
- Achieve a better result for the Restaurant Group’s creditors; or
- Realise some of Restaurant Group’s properties (if any) to make payment(s) to one or more secured or preferential creditors.
It does however, seem unlikely, that the restaurants will be able to make it back from their current situation; especially given the gravity of the debts that have accrued.
The Corporate Commercial Department here at Fisher Jones Greenwood LLP can assist you with explaining the different insolvency procedures and/or guide you through various commercial transactions, such as an acquisition, merger, intra-group re-organisations should your business be in need of restructure going forward. Call 01206 700113 or email [email protected] should you have any enquiries in this regard.
Source: BBC News, Wikipedia