Jamie Oliver’s dream of buying back the farm in Australia is over.
The Jamie Oliver Restaurant Group (Australia) Pty Ltd collapsed on Monday, with the company being placed in the hands of voluntary administrators less than 12 months after the British celebrity chef visited Australia to relaunch the six local restaurants bearing his name.
Oliver bought them from another failed company in March 2017.
The Canberra outlet closed immediately on Monday. The remaining five sites, in the Sydney CBD, Parramatta, Brisbane, Perth, and Adelaide, will continue to operate, salvaged by a last-minute sale to Brisbane-based Hallmark Group, best known for the Irish bar Finn McCools.
The collapse comes just weeks after the depth of The Naked Chef’s global financial woes emerged. Oliver’s businesses have been struggling to restructure their way out of debts of £71.5 million ($AU126 million).
One of his flagship restaurants closed after falling into administration, and the Jamie’s Italian division closed outlets in a bid to stem heavy losses.
The UK Jamie’s Italian business was a sea of red ink, and Oliver had “begged landlords of his underperforming restaurants to cut rents in an attempt to stop the chain going bust” according to The Sun on Sunday.
The most recent financials revealed pre-tax loss of £9.9 million ($AU17.5m) on revenue of £112 million in 2016. Sales were down 3%. The UK business entered into a Company Voluntary Arrangement (CVA) believing it can trade out of its troubles.
In late February Business Insider asked Ben Shaughnessy, chief operating officer of the Australian Jamie’s Italian chain, to comment on the financial health of the local business amid the British problems. He did not respond.
But company documents lodged on Monday with the corporate regulator, ASIC, reveal that serious concerns about the Australian business were apparent just weeks later.
On March 22, Shaughnessy and fellow director Paul Devlin met with advisers from KordaMentha and BDO to discuss the company’s financial position and efforts underway at that point to sell the business.
If the sale fell through, the directors asked for insolvency options, according to BDO.
On April 6, KordaMentha emailed BDO to arrange a meeting with the Jamie Oliver group’s Australian directors to discuss voluntary administration. The Company’s advisers, shareholders and the proposed purchaser, Hallmark Restaurant Holdings (Australia), met to discuss the sale.
Advisers and lawyers for all sides of the deal held a conference call on April 9 “to discuss options with Hallmark to trade the business in advance of completion of the proposed sale” via a license agreement with any administrators.
By April 11, the plan to appoint voluntary administrators was underway.
The following day the restaurant group’s secured creditor, HSBC, was advised of the plan.
Last Friday, Shaughnessy, along with several members of the Hallmark and BDO teams held a conference call “to prepare a plan for ‘Day 1’ of the voluntary administration, including communication with stakeholders and coordinating attendance at restaurants and head office”. HSBC was warned it may happen as soon as Sunday.
On Monday, April 16, Shaughnessy called in the voluntary administrators.
On the door to the Canberra restaurant it says:
It is with great sadness that Jamie’s Italian Canberra has had to close its doors indefinitely.
We thank you for all of your support over the last 4.5 years.
From all the staff at Jamie’s Canberra we bid you a fond farewell.
Big Love Mr O xxx
Oliver first announced plans to acquire the Jamie’s Italian chain from the receivers of the failed Keystone Group in November 2016. Keystone was placed in receivership by its lenders in June 2016, having launched Jamie’s Italian in Sydney’s CBD in 2012 before spreading interstate.
Oliver said at the time that “everything I’ve ever dreamed of has happened” and it was a story with “a really happy ending”.
On Monday evening, the PR business representing Jamie’s Italian in Australia issued a statement, with the failed restaurant group announcing “a new operating partner for its Australian business”.
It quoted a spokesperson for the Jamie Oliver Restaurant Group Australia saying:
Australia has and continues to be one of our best performing international markets and, after a short period of in-house management we are pleased to be partnering with Hallmark.
The team brings a huge amount of experience and passion for our brand, from collaborating with the key suppliers to our food philosophy, and we look forward to working with them as they develop the Jamie’s Italian restaurant offering across Australia.
A spokesperson for Hallmark is quoted as saying they “are actively seeking new suitable locations for the next Jamie’s Italian”.
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