Jamie Oliver restaurant chain collapse: what happened?

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Jamie Oliver's restaurant group has officially failed.

The chain of celebrity chefs from 25 restaurants across the UK went into administration on Tuesday, with all three of Jamie's boards being Italian, Barbecoa and Fifteen closed.

He followed several turbulent years for Oliver: he was forced to sell his Australian restaurants to the Hallmark Group, shut down a number of less-performing establishments and inject $ 24 million of his own money into assets after placing more than $ 125 million in debt.

Now administrators have been appointed and more than 1000 people will lose their jobs.

Oliver, who declared in a statement that he was "devastated" and "deeply saddened" had at his peak more than 60 restaurants worldwide. So how was everything so terribly wrong?

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While his business grew further in debt, last year Oliver himself admitted to "honestly (he didn't know)" why he was failing, but he speculated a "perfect storm" of "rents, tariffs, street decline, food costs, Brexit, (e) increase in the minimum wage "was the fault.

While those things have certainly played an important role – Oliver is one of several large restaurant chains to collapse in the UK in recent years – changing consumer tastes is an important factor.

In search of unique experiences – and something to boast about on social media – diners are increasingly avoiding "cut and paste" restaurants for high-end restaurants that offer a tailor-made experience. Or on the other end of the spectrum, pop-up and dining-style places that offer good value, variety and are seen as more authentic.

"Experience-based meals have become a huge market – every meal has to be good enough for Instagram at least," said Simon Quirk, a consumer specialist for data and in-depth Kantar. iNews.

Oliver grew rapidly, but failed to evolve his offer from the launch of Jamie's Italian in 2008, followed by the Recipease cooking school and gastronomy chain in 2009 and the Barbecoa barbecue chain in 2011, behind the her The naked chef fame.

"The street restaurant sector is changing at an incredible pace, and it seems that Jamie is the last brand that has not been able to keep up," Simon Mydlowski, partner of the Gordons law firm, told the BBC. hotel industry expert.

"To be successful in this business, you have to be constantly evolving – from the menus and drinks chosen to the way you engage with customers," said Mydlowski.

"In the face of higher revenues, rising food prices and increasing competition, restaurants need a point of difference – it is no coincidence that smaller brands with freedom and the flexibility to keep things fresh are currently the ones that are going well ".

BREXIT AT BLOME?

It is not just by changing the food and gastronomic trends that have driven Oliver's restaurants beyond the limit.

Difficult post-Brexit economic conditions, namely the confused consumer confidence and falling pounds have damaged several major British food chains.

Byron Burger, Sarda, Prezzo and Carluccio have all closed a significant number of their shops, and the Valerie patisserie has fallen into administration this year, causing the loss of 920 jobs.

In 2017, after making the decision to block six Jamie Italian restaurants, Oliver partly blamed Brexit for his company's financial difficulties.

In a statement on Tuesday, Will Wright, a spokesman for KPMG, the accounting firm in charge of managing insolvency, mentioned these financial challenges.

"The current business environment for companies across the casual catering industry is as difficult as I've ever seen," said Wright.

"The directors of Jamie Oliver Restaurant Group have worked tirelessly to stabilize the business in a context of rising costs and low consumer confidence."

Last year Oliver admitted that the collapse of his company had taken him by surprise.

"We had simply run out of money," he said Financial Times to save his group of restaurants.

"We did not expect. This is not normal in any business," he explained.

"You have quarterly meetings. You do board meetings. People should handle that stuff should handle that stuff."

Oliver had suffered heavy losses long before Brexit. In 2014, he was forced to close his chain of four traditional British restaurants, the Union Jacks, citing a "difficult climate".

DISASTER PR

Last year, Jamie's Italian in Sydney earned a negative print after a diner saw a chef using frozen dumplings from a package, despite the fact that the restaurant's pasta was home-made every day.

A spokesman claimed that the dumplings were imported because it was "the best traditional, regional and organic products in Italy", and "ensured quality and consistency among all restaurants", but left customers paying $ 28 for a plate of steaming stuff.

But Oliver's PR problems also extend to some unhappy customers.

According to Catriona Pollard, an Australian public relations expert, Oliver's downfall was caused by a series of general public relations errors, including overexposure, a disconnection between his shares and his personal brand and the inability to face a number of disputes head-on.

Ms Pollard said that one of the possible reasons behind those failures was the discrepancy between Oliver's "average Joe" identity and the market atmosphere of his restaurants.

"You can buy one of his books for $ 20, or watch his TV program for free. But many of his restaurants sold expensive meals … which actually didn't accumulate for people," he told news.com.au.

He said that there was also a division between the recognizable image of Oliver and his incredible fortune, estimated at around $ 441 million.

"His personal brand is very much the" everyday boy ", but he doesn't turn into a business man who is so rich. It's a disconnection between his everyday personality and his wealth" he said.

Last year Oliver was accused of hypocrisy after having signed a lucrative 9.1 million dollar deal with the oil giant Shell to renew the food supply at the service station.

But since Oliver had long been a supporter of climate change action, many considered a partnership with an oil company a serious betrayal.

Ms. Pollard said that Oliver's decision to ignore the growing furor has added another blow to his reputation.

"Jamie Oliver has a very distinct personal brand linked to very distinctive values. He is so outspoken when it comes to things like healthy eating and the environmental impacts of climate change, which is great, but … the agreement with Shell is was seen as a negative departure from that very distinct brand, "he said.

"He gave people fodder, and they started to change their opinions about him. That backlash was caused because people thought he didn't behave the way they thought he should."

WHAT HAPPENS NOW?

Oliver and his wife Jools are worth about $ 260 million and live with their five children on a $ 17 million property in Hampstead, north London.

The documents show that the couple's personal assets are not jeopardized by the bankruptcy of the company.

While the failure of his restaurants has undoubtedly left a bad taste in the chef's mouth, and has given him a lot of food for thought, for the media side of his empire is a business as usual.

Oliver has written 23 cookbooks, of which he has sold more than 40 million copies in total, including his phenomenal success Jamie's 15-Minute Meals is Jamie & # 39; s Italy.

He has also acted in more than 20 cooking shows that regularly spread around the world.

According to a spokesman, "Jamie Oliver Holdings, who runs Jamie Oliver Limited and Jamie Oliver Licensing Limited, as well as the international restaurant franchise business, Jamie's Italian International Limited, will continue to trade normally. Even Fifteen Cornwall , which operates in franchising, is not interested. "

Oliver is also likely to continue his healthy food campaigns, including childhood obesity and junk food marketing for children.

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