Restaurants slump hits Jamie Oliver
TV chef shuts more restaurants as sector is hit by fall in bookings
JAMIE Oliver is one of the most famous – and wealthy – celebrity chefs in the country. But now problems in his sprawling business empire have been laid bare.
Two of Oliver’s high-profile dining businesses – Jamie’s Italian and upmarket steak chain Barbecoa – have run into trouble, leaving a trail of restaurant closures and hundreds of job losses.
They are not alone. Burger joint Byron and Italian chain Strada are among the other businesses that have already triggered closures so far this year.
The sector is facing a long and unpalatable menu of challenges: the weakness of the pound since the Brexit vote means restaurants are paying higher prices for food when consumers are balking at price hikes. Meanwhile, wage costs and business taxes have soared.
Oliver, 42, is not the only entrepreneur facing problems. But industry experts spoken to by The Mail on Sunday believe he and his management team – including his brother-in-law Paul Hunt – need to take their share of the blame for their business issues.
Oliver, who rose to fame as a TV chef in the late 1990s, launched Jamie’s Italian with his Italian mentor, Gennaro Contaldo, in 2008.
‘ There was a big hype around Jamie Oliver – as much, or more than, the food. And the restaurants were difficult to get into, which makes consumers want to go more,’ recalls one industry source.
But cracks began to emerge early last year – amid rumours that bookings across the restaurant market had been falling for months – when the business announced the closure of six of its 42 UK restaurants.
Earlier this month, the company confirmed it would be closing 12 more outlets.
Oliver pumped £3 million of his personal fortune – estimated at £150 million – into Jamie’s Italian in December. But he was unable to stave off this month’s closures. What has gone wrong? The industry source added: ‘The Jamie Oliver hype sustains itself for one or two visits. But over a period of time it comes down to what differentiates this from any other Italian dining brand. And there was nothing that was better than anything else.’
Mark Sheehan, managing director of Coffer Corporate Leisure, said the biggest issue for the casual dining sector is that there are a number of businesses all ‘competing for the same customers’. He added: ‘Restaurants have to differentiate themselves and provide top quality service and food to thrive.’
Shortly after Jamie’s Italian confirmed this year’s restaurant closures, Oliver’s London steakhouse business Barby Limited – which ran two restaurants under the name Barbecoa – last week went into administration, closing its Picca- dilly site just a year after it opened its doors. Oliver was able to rescue the original Barbecoa – opened in the shadow of St Paul’s Cathedral in 2010 – by purchasing i t back through a newly formed business.
‘These restaurants opened at a time when no one was saying: what we really need is more steak restaurants in London,’ said an industry source. ‘Another problem was that the Barbecoa brand was not closely associated with Jamie Oliver.’
Jamie’s Italian and Barbecoa are not the first Oliver brands to run into trouble, suggesting there may be deeper problems with the celebrity chef ’s empire. In 2013, he scrapped his Jme artisan biscuits, sauces and jams. Soon afterwards, he pulled the plug on his cafe business Recipease, but later launched the Jamie Oliver Cookery School. And last year he closed his self-titled cookery magazine and the last of his Union Jacks pizza restaurants.
A former employee of the Oliver empire described him as a ‘handson’ and ‘inspirational’ figurehead who remains popular among staff. However, they were critical of the senior team at the top of his business – in particular, his brother-in-law Hunt, chief executive of the Jamie Oliver Group, who was brought in 2014. Hunt’s appointment raised eyebrows at the time because of his background in the City – where, in 1999, he was fined £60,000 over insider trading – and was followed by a series of redundancies. The former employee said that while this did achieve savings and profitability, the cuts were damaging to staff morale and also, they said, affected quality across Oliver’s businesses.
Jon Knight – the chief executive of Jamie Oliver Restaurant Group – spoke frankly about the recent failings, admitting the business had become ‘complacent’ and allowed itself to become overtaken by newer restaurant brands.
By comparison to Knight, an industry source said that Oliver has been ‘spectacularly absent’ in recent weeks by not commenting on the Jamie’s Italian and Barbecoa troubles. With hundreds of jobs gone this year, Oliver’s remaining staff – and the industry – are eagerly awaiting a future recipe for success.
A spokesman for the Jamie Oliver Group said: ‘Jamie is right at the heart of all parts of our businesses – working with the restaurant management team as well as campaigning for the ban of the sale of energy drinks to kids and filming a new series of his hit show Jamie’s Quick And Easy Food for Channel 4 to name but a few projects.’