How it all went wrong for Jamie Oliver

Jamie Oliver's restaurant group has officially gone under.

The celebrity chef's chain of 25 eateries across the UK went into administration on Tuesday, with all but three of his Jamie's Italian, Barbecoa and Fifteen outlets shuttered.

It follows several turbulent years for Oliver: He was forced to sell his Australian restaurants to Hallmark Group, close a number of underperforming establishments and inject $24 million of his own money into the business after it plunged more than $125 million into debt.

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

Oliver, who said in a statement he is "devastated" and "deeply saddened", at his peak had more than 60 restaurants worldwide. So how did it all go so horribly wrong?

'NOT ABLE TO KEEP UP'

As his business spiralled further into debt, last year Oliver himself admitted he "honestly (didn't) know" why it was failing but speculated a "perfect storm" of "rents, rates, the high street declining, food costs, Brexit, (and) increase in the minimum wage" was to blame.

While those things certainly played a part - Oliver's is one of several restaurant large chains to collapse in the UK in recent years - changing consumer tastes are a major factor.

Seeking unique experiences - and something to brag about on social media - diners are increasingly shunning cut-and-paste eateries for high-end restaurants that offer a bespoke experience. Or at the other end of the spectrum, pop-up and food hall-style venues that offer good value, variety and are seen as more authentic.

"Experience-based dining is now a massive market - every meal needs to be good enough for Instagram at the very least," Simon Quirk, a consumer specialist at data and insight specialist company Kantar told iNews.

Oliver rapidly grew but failed to evolve his offering since the launch of Jamie's Italian in 2008, followed by the Recipease cooking school and deli chain in 2009 and barbecue chain Barbecoa in 2011, off the back of his The Naked Chef fame.

 

Jamie's Italian restaurant near London Bridge in London. More than 1000 jobs will be lost. Picture: Getty
Jamie's Italian restaurant near London Bridge in London. More than 1000 jobs will be lost. Picture: Getty

 

 

"The high street restaurant sector is changing at an incredible pace, and it seems Jamie's is the latest brand that was not able to keep up," Simon Mydlowski, a partner at law firm Gordons and a hospitality industry expert, told the BBC.

"To be successful in this sector you have to be constantly evolving - from the menus and the drinks choice to the way you engage with customers," Mr Mydlowski said.

"Faced with higher rent, rising food prices and increased competition, restaurants need a point of difference - it's no coincidence that smaller brands with the freedom and flexibility to keep things fresh are currently the ones performing well."

BREXIT TO BLAME?

It's not just changing food and dining trends that pushed Oliver's restaurants over the edge.

Tough economic conditions post-Brexit, namely shaky consumer confidence and a falling pound have hurt several major British food chains.

Byron Burger, Sarda, Prezzo and Carluccio's have all shut significant numbers of their stores, and Patisserie Valerie fell into administration this year, resulting in the loss of 920 jobs.

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

 

Chefs in the kitchen at Jamie Oliver's restaurant on King William Street, Adelaide. Oliver sold his Australian restaurants last year.
Chefs in the kitchen at Jamie Oliver's restaurant on King William Street, Adelaide. Oliver sold his Australian restaurants last year.

 

In a statement on Tuesday Will Wright, a spokesman from KPMG, the accounting firm appointed as administrator to handle the insolvency, alluded to such financial challenges.

"The current trading environment for companies across the casual dining sector is as tough as I've ever seen," Mr Wright said.

"The directors at Jamie Oliver Restaurant Group have worked tirelessly to stabilise the business against a backdrop of rising costs and brittle consumer confidence."

Last year Oliver admitted his business's plunge into debt had taken him by surprise.

"We had simply run out of cash," he told the Financial Times of bailing out his restaurant group.

"We hadn't expected it. This is just not normal, in any business," he explained.

"You have quarterly meetings. You do board meetings. People supposed to manage that stuff should manage that stuff."

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

PR DISASTER

Last year Jamie's Italian in Sydney earned negative press after a diner saw a chef using frozen gnocchi from a packet - despite the restaurant spruiking its pasta was made fresh in-house daily.

A spokesman claimed the gnocchi was imported because it was "Italy's finest traditional, regional and organic produce", and it "ensured quality and consistency across (all) restaurants", but it left customers who pay $28 for a plate of the stuff fuming.

But Oliver's PR problems extend even further than a few unhappy customers.

According to Aussie public relations expert Catriona Pollard, Oliver's downfall was caused by a series of classic PR blunders, including overexposure, a disconnect between his actions and his personal brand and a failure to address a number of controversies head-on.

 

Celebrity chef Jamie Oliver has suffered a number of PR disasters.
Celebrity chef Jamie Oliver has suffered a number of PR disasters.

 

Ms Pollard said one possible reason behind those failures was the mismatch between Oliver's "average Joe" identity and the up-market feel of his eateries.

"You can buy one of his books for $20, or watch his TV show for free. But a lot of his restaurants sold expensive meals … which didn't really stack up for people," she told news.com.au.

She said there was also a divide between Oliver's relatable image and his staggering fortune, estimated to be around $441 million.

"His personal brand is very much the 'everyday lad', but that doesn't convert to a businessman who is so wealthy. There's a disconnect between his everyday persona and his wealth," she said.

Last year Oliver was accused of hypocrisy after signing a lucrative $9.1 million deal with oil giant Shell to revamp its service station food offering.

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

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

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

"It gave people fodder, and they started to change their opinions of him. That backlash was caused because people thought he wasn't behaving the way they thought he should."

WHAT HAPPENS NOW?

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

Documents show the couple's personal assets are not put at risk by the bankruptcy of the business.

While the failure of his restaurants has no doubt left a bad taste in the chef's mouth, and given him plenty of food for thought, for the media side of his empire it's business as usual.

 

Oliver and wife Jools, who have five children, are thought to be worth around $260 million. Their personal assets are not affected by the bankruptcy.
Oliver and wife Jools, who have five children, are thought to be worth around $260 million. Their personal assets are not affected by the bankruptcy.

 

Oliver has written 23 cookbooks, of which he sold more than 40 million copies in total, including his phenomenally popular Jamie's 15-Minute Meals and Jamie's Italy.

He has also starred in more than 20 cooking shows that air regularly around the world.

According to a spokesman, "Jamie Oliver Holdings, which operates 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 as normal. Fifteen Cornwall, which operates under a franchise, is also unaffected."

Oliver is also likely to continue his healthy eating campaigns, including tackling childhood obesity and junk food marketing targeted at kids.



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