James Trevor Oliver MBE, more commonly known as Jamie Oliver, has spent over two decades in the public eye as a celebrity chef and best selling author. Last month 22 out of his 25 Jamie’s Italian restaurants collapsed, leaving over 1300 people facing redundancy. What went wrong for Jamie’s Italian empire?
The ‘Naked Chef’ rose to fame in the late 1990s with his BBC TV series and became a household name in the UK as the face of supermarket Sainsburys. Despite being bestowed with a title of honour, he continues to divide public opinion. A key reason for this is the role he played in the drive for healthy eating in schools from 2005. Although healthy eating is a growing trend in today’s society, many people resent that this initiative removed the element of choice from school meals.
Fast forward a few more years and Jamie opened his first Jamie’s Italian restaurant in 2008. At its peak the restaurant chain had over 60 restaurants worldwide. However, this figure was reduced to 25 restaurants until last month, where 22 of these restaurants folded leaving only three locations based at Gatwick Airport open ‘in the short term’.
What went wrong?
It is clear from events that have taken place that Jamie’s Italian faced severe financial difficulty. There are no figures available for the Jamie Oliver Restaurant Group, however accounts produced for Jamie’s Italian Limited show a loss of over £29 million for the period ending December 2017.
There are numerous factors which are likely to have played a part in the collapse of Jamie’s Italian. The traditional British ‘high street’ has faced difficulties over the last few years with decreased footfall as more people have taken up online shopping, including using online delivery services to order takeaways rather than dining at a restaurant. This combined with increased rent has led to many restaurants and eateries across the UK closing outlets, including well-known companies such as Byron Burger and Gourmet Burger Kitchen.
Another factor is the price point of Jamie’s Italian. The chain is already within a very saturated market as an Italian restaurant on the high street, yet prices are generally higher than competitors such as Pizza Express. For example, a margherita pizza is approximately 6% more expensive at Jamie’s Italian compared to Pizza Express. Although this amount may seem marginal, it could be a reason why consumers shied away from the chain. Without the celebrity chef behind the celebrity name, perhaps consumers did not feel the difference in price was reflected by a difference in quality.
Administrators KPMG have been put in place to deal with the aftermath of the collapse. They said: “since the beginning of this year, Jamie Oliver has made available additional funds of £4m to support the fundraising.” The uncertainty surrounding Brexit could be a factor which has made investors fearful of investing in the chain.
Jamie Oliver has published the following statement on Twitter: “I’m devastated that our much-loved UK restaurants have gone into administration. I am deeply saddened by this outcome and would like to thank all of the people who have put their hearts and souls into this business over the years.”
However, over 1300 of these people are facing redundancy as a result of the collapse. Stories have already emerged of claims being brought amounting to over £100,000 as employees seek the outstanding amounts they are owed. This includes wages, holiday pay, notice pay, redundancy pay and potentially a protective award.
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