Jamie Oliver’s story: the perils of going for growth without managing cashflow

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https://www.ft.com/jamieoliver

Mark Edmonds AUGUST 30, 2018

It was a balmy evening last September. Jamie Trevor Oliver MBE, multimillionaire chef, philanthropist and scourge of soft drink barons, was filming an episode of his Channel 4 series Friday Night Feast with A-list actor Liv Tyler. In the decidedly un-Hollywoodish setting of Southend Pier in Essex, Oliver’s star guest began to show him how she cooks her signature dish of prawn dumplings. And then his mobile rang.

It turned out to be an uncomfortable call and for once the chef found himself bereft of the boyish bonhomie that has sustained him since he launched his television career as The Naked Chef in 1999. Oliver ordered his crew to stop filming. The message from the person at the other end of the line was brutal and to the point.

Oliver’s restaurant chain, Jamie’s Italian, which his company had aggressively expanded from a single outlet in Oxford in 2008 to 43 restaurants by the end of 2016, was in serious trouble and teetering on the brink of bankruptcy. “We had simply run out of cash,” he recalls, as we sit on a vintage sofa at Oliver headquarters in north London nine months later.

“And we hadn’t expected it. That is just not normal, in any business. You have quarterly meetings. You do board meetings. People supposed to manage that stuff should manage that stuff.” A surprisingly sharp tone in his voice suggests that someone let him down and he was none too pleased.

Oliver was left with no choice but to instruct his bankers to inject £7.5m from his own savings into the restaurants. A further £5.2m of his own money would follow over the next few months. Last year, Oliver was said to be worth £150m. Even so, £12.7m is not the kind of money that slips down the back of a sofa, vintage or otherwise.

“I had two hours to put money in and save it or the whole thing would go to shit that day or the next day,” he continues. “It was as bad as that and as dramatic as that.” For Oliver, now 43, the past year has been exceptionally painful.

He has been forced to close 12 restaurants and make hundreds of people redundant: his company has been in turmoil and he has endured savage press criticism, not least over the controversial decision to stand by his brother-in-law Paul Hunt, who he appointed as chief executive of the Jamie Oliver Group in 2014.

Oliver doesn’t do many in-depth interviews, especially when the subject matter might be perceived as “bad news” — yet he is disarmingly honest in our conversation about his group’s failings. This is the first time he has talked at length about the problems in the business. He has estimated in the past that he “f**ked up” 40 per cent of his business ventures over the course of his career, but what went so catastrophically wrong with the restaurants? And what does it mean for Oliver’s business in the future? “I honestly don’t know [what happened],” he admits. “We’re still trying to work it out, but I think that the senior management we had in place were trying to manage what they would call the perfect storm — rents, rates, the high street declining, food costs, Brexit, increase in the minimum wage. There was a lot going on.”