The creditors of celebrity chef Jamie Oliver’s Jamie’s Italian chain of restaurants are set to millions of pounds after the collapse of the business.
Jamie Oliver Restaurant Group (JORG) operated 23 restaurants across the UK under the Jamie’s Italian name but succumbed to tough trading conditions in May this year, when it appointed KPMG as administrator of the business.
KPMG continued to trade three restaurants at Gatwick Airport while it tried to find a buyer for them but closed the remaining 20 restaurants.
Now, in a new report, the administrator said it expected the company’s secured creditors to suffer a “significant” shortfall. That includes Jamie Oliver Holdings Limited (JOHL), a company outside of the restaurant group, which covers all of the celebrity chef’s media interests.
JOHL made an ex gratia payment of just over £1m (€1.1m) to cover all employee arrears in the collapsed restaurant group, following the administration. JOHL also provided secured loans totalling £18.3m (€19.9m) to try and keep JORG afloat and is now likely to suffer a shortfall of £16m (€17.4m), KPMG said. In addition to that, it also provided guarantees of £4.7m (€5.1m) to HSBC bank which have since been paid out and has further unsecured intercompany loans of £3.5m (€3.8), potentially leaving Oliver’s surviving company out of pocket to the tune of £24.2m (€26.3).
Meanwhile, HSBC provided secured debt totalling £39.4m (€42.9m). KPMG said it “will likely not receive any distributions in the administration”.
JORG had been struggling for some time, having entered a Company Voluntary Arrangement (CVA) in February 2018 to compromise certain terms of its lease agreements with landlords at some of its restaurants sites in a bid to survive. It also closed a number of stores.
The company, founded in 2003, had a total of 1,203 staff and in its last accounts at 31 December 2017 had a turnover of £100.6m (€109.4m), on which it made a pre-tax loss of £31.1m (€33.8m).