The definition of insanity, the old saying goes, is doing the same thing repeatedly but still expecting a different result.
So what are we to make of Jamie Oliver’s recent decision, months after the collapse of his UK restaurant empire, to dust down his dough-spattered apron and launch a new global food chain?
The TV chef debuted Jamie Oliver’s Kitchen in Bali and Bangkok late last year, serving up an ‘all-day eating’ concept that revolves around hoisin duck and tom yum pizzas, katsu chicken and soft-shell crab burgers, plus a fish stew that is allegedly a ‘Jamie classic’.
Jamie’s Italian began expanding rapidly, opening a new branch every couple of months. By 2016 there were 43 outlets, many occupying prestigious locations in town centres and shopping malls. But behind the scenes, serious problems were building
‘Over the past 20 years I have travelled around the world to discover exciting flavour combinations, picking up incredible influences along the way,’ he declared.
‘The new restaurants will bring those inspirations to life and serve some of my absolute all-time favourites.’
Meanwhile, back in Blighty, bean-counters from accountancy firm KPMG are still poring over the wreckage of his last bold attempt to crack the so-called casual dining market.
They have been brought in as official administrators to work out exactly how many millions of pounds were lost in the wood-fired ovens of his failed chain Jamie’s Italian, which collapsed last May with the loss of about a thousand jobs.
The final bill? A mere £80 million, almost all of which is unlikely ever to be recovered.
Oliver’s trail of financial devastation was laid bare by KPMG this month in a report naming 288 of the companies, town halls, individuals and public organisations that have potentially been left out of pocket by his venture.
Krys Orzechowski, the man responsible for cleaning Oliver’s Cardiff restaurant, is seeking to recover £4,471 from the liquidators. ‘If I were to make the sort of mistakes made by this guy, I’d end up bankrupt and ruined,’ he says
And how do these creditors — which include scores of small businesses, along with a number of the blameless staff who toiled in his High Street restaurants — think the famously chirpy 44-year-old (whose net worth is even now conservatively estimated at more than £150 million) has treated them?
Try asking Krys Orzechowski, the man responsible for cleaning Oliver’s Cardiff restaurant. He is seeking to recover £4,471 from the liquidators.
‘If I were to make the sort of mistakes made by this guy, I’d end up bankrupt and ruined,’ he says.
‘Maybe even in prison. But he’s straight away launching another business.
‘How does this happen? It’s so unfair. The big boys, they never seem to suffer. It’s people like us who have to take the hits. We don’t seem to have any power.’
Mr Orzechowski’s financial hit may seem like chump change to Oliver, who lives in a £10 million pile in Hampstead and spent last year refurbishing his family’s new weekend home in Essex, a £6 million Tudor mansion in 70 acres of parkland.
But cleaner Krys, a 33-year-old father of two, is a man of modest means.
Originally from Poland, he came to the Welsh capital in the early 2000s to work as a nightclub doorman, then switched careers a decade ago after learning that many bars, clubs and restaurants in the city had difficulty finding efficient cleaners.
With his wife Wioletta, he launched a specialist cleaning firm called PAT and has since devoted his life to it.
It’s tough gig. The couple often work seven-day weeks with very antisocial hours. But hard graft can pay — and by May last year they even felt able to take their two young children on a modest holiday.
‘It was our first one for four years, so I was in a really good mood for the first few days,’ says Krys.
‘But then we got the news that Jamie’s Italian had collapsed. His restaurant was one of our main contracts and we had four or five employees working on it, so it left me with a big problem.’
Oliver’s trail of financial devastation was laid bare by KPMG this month in a report naming 288 of the companies, town halls, individuals and public organisations that have potentially been left out of pocket by his venture. A former Jamie’s Italian in Guildford, Surrey is pictured above
Mr Orzechowski soon realised he was owed a month’s worth of income from the collapsed restaurant company.
He also faced several outstanding bills, including the wages of staff he’d hired to work there.
‘I still have to pay my people and pay for chemicals and equipment, and when you are a small company and something like this happens it leaves a massive hole in your budget. This is a tough industry and we work very hard indeed. When it’s your own business you never really stop.
‘We have come to accept we may not get any money back, and I think we will survive. But it’s difficult.’
Others are equally disgruntled. Oliver’s butcher, Direct Meats, has taken a £221,000 hit, while Direct Seafoods, which supplied ingredients for Jamie’s Italian’s £15.30 prawn linguine, claims to have lost £101,000.
Carenvale, a specialist importer of Italian produce, says it is down £256,000, while the food supplier Brake Brothers, the biggest industry creditor, says it has lost £850,000.
Staff at one of those firms said this week that their chief executive was privately ‘spitting feathers’ at Oliver.
Only the fear of upsetting his allies in the industry is preventing him from voicing his criticism publicly.
Elsewhere on the list of creditors are several of Oliver’s own employees. For example, Sylvain Police, a waiter from his Leeds restaurant, is owed £83.
Alice Pilkington, who worked for him in Chiswick, is £480 out of pocket. Jake Melles, a musician hired to entertain guests at his Guildford branch, has lost £250.
As preferred creditors, they are likely to be paid but there will be a long delay in receiving payment.
Most of those sums represent outstanding demands for business rates, thanks to Oliver’s restaurants being allowed to build up arrears by many local tax authorities before his company hit the wall
Again, these may seem like trifling sums to Oliver, who paid himself a £5.2 million annual dividend from his holding company in 2018.
But to workers on the front line of the hospitality business, often paid the minimum wage, such debts can cause serious financial hardship.
And it’s not only staff and suppliers who have a right to feel aggrieved. Also counting the cost are the taxpayers of cities and boroughs including Manchester (whose council lost £89,000), Oxford (£113,000), Cardiff (£118,000), Edinburgh (£103,000), Glasgow (£98,000), Islington (£135,000) and Liverpool (£107,000).
Most of those sums represent outstanding demands for business rates, thanks to Oliver’s restaurants being allowed to build up arrears by many local tax authorities before his company hit the wall.
In the City of Westminster, to cite perhaps the worst example, Jamie’s Italian owed the council £353,000 —roughly £1.50 for every man, woman and child who lives there — at the time it entered administration.
In fairness, it should be stressed that Jamie Oliver’s bank balance has been badly dented by the chain’s collapse, too.
His holding company, which also oversees his lucrative empire producing cookery books and TV shows, faces losses of up to £24.2 million, according to KPMG.
It is the second largest creditor after HSBC, which is likely to be forced to write off a £39 million loan.
Oliver himself, it should be pointed out, has also expressed contrition over the Jamie’s Italian collapse.
Last July, in a newspaper interview, he described it as ‘the most disappointing’ experience of his life, adding: ‘Massive lessons learned — I will never make them again, never again, never again, never again.’
The story of Jamie’s Italian could be described as a tragedy brought about by bad luck, naivety and a dollop of hubris.
For while he may have been an accomplished chef and a highly gifted broadcaster, not to mention a popular celebrity, Oliver was never entirely cut out to be a successful businessman. And he had little to no experience of running a ‘casual dining’ chain
It dates back to the mid 2000s, just over a decade after Jamie was spotted working as a lowly chef at the swanky River Cafe in Hammersmith and catapulted to fame as the star of hit TV series The Naked Chef, who knocked up impromptu dinners for girlfriend Jools.
They married in 2000 and now have five children: Poppy, 17; Daisy, 16; Petal, ten; Buddy Bear, nine; and River, three.
It was thanks to his fame as a broadcaster, and the money he earned from selling more than £100 million worth of recipe books, that he felt able to venture into the restaurant business — first via the commendable Fifteen charitable venture, which helped underprivileged youngsters become chefs, then by the launch of his mid-market Jamie’s Italian chain.
When he opened the first branch of Jamie’s Italian in Oxford in 2008, Oliver said he had been inspired by his childhood growing up at The Cricketers, the pub owned by his father Trevor in Clavering, Essex.
He said he wanted to recreate that ‘great cocktail’ for customers of quality food at a competitive price.
For a time, the big idea seemed to be working. Jamie’s Italian began expanding rapidly, opening a new branch every couple of months.
By 2016 there were 43 outlets, many occupying prestigious locations in town centres and shopping malls.
But behind the scenes, serious problems were building.
For while he may have been an accomplished chef and a highly gifted broadcaster, not to mention a popular celebrity, Oliver was never entirely cut out to be a successful businessman. And he had little to no experience of running a ‘casual dining’ chain.
Dyslexic and having left school at 16, he once told an interviewer he had ‘f****d up’ 40 per cent of his commercial ventures.
‘There is often a disadvantage to getting in first,’ he said. ‘In the future, I might spend a bit more time getting in second and getting it right.’
Jamie’s Italian found itself operating in a crowded marketplace at a time when relentless competition was driving the likes of Carluccio’s, Prezzo, Strada and Pizza Express into serious financial difficulties.
In the view of many consumers, it was also charging over the odds for mediocre dishes (in part due to Oliver’s insistence on using high-welfare ingredients).
What’s more, the company had made a series of poor financial decisions during its years of expansion, occupying sites that were too expensive and paying more than the going rate to fit them out.
It was also being hammered by increases in the minimum wage, along with rising local government taxes, in what Oliver later called ‘a perfect storm’. In 2016, it slumped from a pre-tax profit of £2.4 million to a loss of £9.9 million.
In fairness, it should be stressed that Jamie Oliver’s bank balance has been badly dented by the chain’s collapse, too. His holding company, which also oversees his lucrative empire producing cookery books and TV shows, faces losses of up to £24.2 million, according to KPMG
‘We were having to close the restaurants that took the most cash,’ Oliver said.
‘Rent, business rates and the cost of labour were our worst enemies. Then there was the High Street decline and people ordering food by Uber. The whole business was changing and we weren’t able to respond quickly enough.’
On the corporate front, there were also growing questions about the company’s governance under the stewardship of his brother-in-law Paul Hunt, a flashy former City trader who had been appointed chief executive of the Jamie Oliver group in 2014.
In his younger years, Hunt had been fined and briefly banned from his industry for ‘front-running’, a practice in which traders take an order for shares that is big enough to move the market price but, before placing the deal, buy the shares themselves and pocket a profit.
Once installed by Oliver, he axed several underperforming areas of the empire, including a cookery-school chain called Recipease and a wood-fired oven company, which between them had liabilities of £15 million. He also closed some loss-making restaurant outlets.
At about the same time, several senior executives left in what was described as a ‘restructuring’.
But in 2017 one got their revenge, giving an anonymous interview to The Times in which Hunt was characterised as an inept bully who had a problem with high-flying women and was mismanaging the business.
‘Paul Hunt is an arrogant, incompetent failure,’ the former executive declared. ‘He knows virtually nothing about restaurants and less about publishing. He’s running the business into the ground and the day he resigns the staff should have a big party… morale is at rock bottom.’
Hunt called the claims ‘vindictive’ and ‘baseless’. Oliver insisted they were ‘nasty’ and ‘nonsense’. But whatever the truth, Jamie’s Italian kept haemorrhaging cash.
‘It felt like a colander — the business was full of holes and there was nothing we could do to plug them,’ Oliver later recalled.
Eventually, the edifice collapsed. And the question now is, will Oliver’s new venture be more successful?
Supporters point out that Jamie Oliver’s Kitchen is a very different business which intends to expand via franchises (rather than owning individual restaurants) into overseas markets.
They also say plenty of entrepreneurs fail sometimes, and insist Oliver has learned from his previous mistakes.
Let’s hope they are right. Otherwise, as the Naked Chef might say, it could end up being bish, bash, bosh for another collection of his suppliers.