WORLD renowned chef Jamie Oliver’s company has cooked up more than $125 million in debt, with his Italian restaurant chain forced to shut down a number of their eateries.
The TV star begged landlords to cut his rent at a number of his underperforming restaurants to avoid his business going bust.
In a crucial meeting on Friday, his creditors voted to cut rent at some restaurants by 30 per cent.
The Company Voluntary Arrangement means the firm can still trade but 12 of 25 sites in the UK will shut with 450 jobs lost as the business undergoes a massive restructure.
Oliver also has 28 restaurants overseas, including a number in Australia, but at this stage it is understood they will not be affected.
High Court documents, obtained by The Sun, revealed Jamie’s Italian Limited owes about $53 million (£30.2million) to financial services company HSBC in overdrafts and loans.
It is also about $73 million (£41.3million) in the red with creditors such as the taxman, landlords and suppliers – with staff owed $3.89 million (£2.2million).
The news of a restructure is a massive relief for creditors who may not have been paid if the company had gone into administration.
Jamie, 42, and wife Juliette ‘Jools’ are worth around $260 million and live with their five children in a $17 million property in Hampstead, North London.
They also own a country house in Essex.
Documents show their personal assets are not at risk if the business goes under.
Legal papers blamed underinvestment, unsuitable new locations and high costs.
The firm said: “We are pleased to have received the overwhelming support from our creditors for our proposal to reshape Jamie’s Italian restaurants. We have a strong brand and are focused on continuing to deliver the levels of service, taste and the experience our loyal customers deserve.
“We are working hard to ensure that our estate is fit for the current trading environment and we feel confident that this newly shaped business will provide strong opportunities for growth and profitability.”
“We feel confident this newly shaped business will provide growth and profitability.
A company spokesman added: “The CVA approval ensures Jamie’s Italian’s great staff and suppliers can all get paid and has saved 1800 jobs.”
Simon Bonney, of administrators Quantuma LLP said: “Jamie’s proposal for a CVA is the latest in a long line of food and beverage and retail companies who have multiple sites, which they can no longer afford, often signing up to leases as part of a strategy to grow, but failing to convert some of those locations into profitable sites.
“A number of these CVAs fail. Generally this is because the proposal was not sufficiently well thought out to have a real effect on the future viability of the company, or represents a sticking plaster for the company’s woes.”
Experts doubt the chain will survive in the long-term.
** EDITORS & SITE OWNERS COMMENTS BELOW
There was a spark of achievement initially with our lovable son Jamie.
He has generated aan interest withe. mums & dads & home chefs of the world..But..
He locked into a corporate image & lost the focus of his simple lovable worth.
BAD ADVISORS I WOULD THINK..HIS ATTEMPT AT CORPORATE STATURE WAS WRONG..
THE IMAGE HE PORTRAYED TO THE PUBLIC WAS DIFFERENT TO THE DIRECTION HE WAS GOING
If he rings me personally i will advise him to the best of my ability.
YES I OWNED RESTAURANTS & HOTEL & LIQUOR BARN & NIGHT CLUB ETC.
NOW RETIRED. www.sapiecha.com
He went over his head with how & with who he did what he did.
The outcome was inevitable & evident 2-3 years ago.
Nice guy but it was over his head BIG TIME
I AM FOR YOU JAMIE..GOOD LUCK