Jamie Oliver’s Italian failure costs councils £1.3m

Hard-pressed councils are likely to lose more than £1.3 million from the collapse of Jamie Oliver’s restaurant chain as administrators come close to winding up the stricken business.

Documents published by KPMG, which is managing the chain’s insolvency, show that unsecured creditors, including 19 councils, will see more than 90 per cent of the cash they are owed wiped out.

Jamie’s Italian owed local authorities £1.44 million in unpaid business rates and taxes when it collapsed in 2019. This is in addition to the £1.25 million that it owed to the taxman in unpaid VAT. The debts include tens of thousands of pounds owed to some of the poorest boroughs in the country. Newham council in east London — where half of children live in poverty — is owed £80,000. Over the past decade, Newham has had to close 13 of its 18 youth centres because of budget cuts.

Jamie’s Italian also owes Tower Hamlets council £55,000, Liverpool city council £108,000 and Manchester city council £90,000.

Oliver, 46, is reported to have a fortune of more than £200 million while his holding company, which runs his publishing business, reported a profit of nearly £7 million last year.

At its peak Jamie’s Italian had 42 restaurants but from 2015 onwards the chain started struggling with bad customer reviews, discontent among staff and a wider slump in eating out. In 2019, despite efforts to save the business by closing several restaurants, the company collapsed with the loss of more than a thousand jobs.

KPMG’s latest progress report on the administration estimates that less than £600,000 will be recovered from the business to return to unsecured trade creditors, such as councils and small businesses. Jamie’s Italian owed these creditors £6.86 million.

Small businesses that are set to lose out include five cleaning firms that are collectively owed £10,400, a waste management company that is owed more than £20,000, an electrical contractor that is owed £10,000 and a uniform supplier that is owed £11,500.

Creditors will be informed exactly how much they will get back next month.

The KPMG documents also show that several prominent brands will end up out of pocket. The Hilton hotel at Tower Bridge, for example, is owed £55,000 and Belu, the bottled water company, is owed nearly £18,000. Rooms at the hotel start at £186 a night while 750ml bottles of the Belu cost less than £1 each wholesale.

The documents show that Jamie’s Italian had total debts of more than £80 million when it closed down, with the majority owed to banks and Jamie Oliver’s holding company. However, at least £1.5 million of the debts owed to the holding company, which is majority-owned by the celebrity chef, will be returned because it is classed as a secured creditor.

KPMG says the administration process is due to be completed by May. Oliver declined to comment.