Celebrity chef uses own money to save business

Jul 3 2009 by Iain Laing, The Journal

PROFITS at Gordon Ramsay’s UK restaurants plunged nearly 90% in a “turbulent” year in which the celebrity chef was forced to pump his own money into the business.

Ramsay’s latest company accounts show that the restaurant empire came close to the brink as revenues collapsed while debt and tax bills mounted up.

The precarious situation caused the TV chef and his father-in-law and business partner Chris Hutcheson to inject the business with £5m.

Ramsay’s business problems were blamed on ambitious expansion as well as the closure of key London restaurants like the Savoy as pre-tax profits tumbled from £3.05m in 2007 to £383,325.

The Savoy Grill was shut because of refurbishment at its host hotel, while the Connaught lease expired. The two restaurants alone accounted for a £9.5m reduction in revenues.

A statement from the firm yesterday said that, after a restructuring of operations, it was confident the group had “successfully undergone change for the better” and was now “well-placed to grow its operation with a more stable capital base and a more manageable overall structure”.

Ramsay’s restaurant empire expanded “significantly” in 2007 and 2008, leaving the business vulnerable to the economic headwinds.

In the year to August 2008, turnover dropped to £35m from £41.6m the previous year.

Meanwhile, net debt soared from £4.06m to £9.48m.