His steaks many be rich and juicy and his media profile bigger than ever, but the profits from Gordon Ramsey’s restaurant empire have dried up in the bain marie of the global recession.
While Ramsey’s global network of restaurants has exploded in recent years – he now has 25 eateries across four continents, 16 of which have 14 Michelin stars – it appears falling discretionary spending has taken a big toll on the Gordon Ramsey Holdings empire.
Profit before tax for the 12 months to August 31 was £383,326, an 87% fall from the £3 million made the year before. Revenue fell 14% to £35.6 million, while net debt rose from £4 million to £9.5 million and interest payments more than doubled from £261,097 to £545,563.
Ramsay has admitted the company came dangerously close to collapsing into administration, which was only avoided after he and father-in-law-come-business-partner Chris Hutcheson were forced to inject £5 million of their private savings into the business. The company has also been forced to renegotiate a £10 million loan with the Royal Bank of Scotland.
Hutcheson insists the worst is behind them now.
In April, the culinary star’s name fell off the Sunday Times rich list. Ramsay’s fortune was previously valued at £50 million, but the title of the richest chef in Britain now belongs to Jamie Oliver, who is estimated to be worth £40 million.
Of Ramsay’s 25 restaurants, many are reducing their opening hours.
His two-year-old New York restaurant, called ‘Gordon Ramsey at the London’, has ceased its lunchtime service and is now only open five days a week. His restaurant in Dubai stopped serving breakfast and lunch, while his restaurant in Prague has closed.
With a new restaurant that opened in South Africa just in April and serious talk of a restaurant in Florida and a bistro in Melbourne, some are attributing GRH’s difficulties with the speed of its growth.
Hutcheson says plans are baking to re-open restaurants Petrus and the Savoy Grill next year.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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