'Turbulent' year for Gordon Ramsay as profits dive 90%

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 £5 million.



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 £3.05 million 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 £9.5 million reduction in revenues.



A statement from the firm today 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 £35 million from £41.6 million the previous year.



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



A full review of operations was instigated in December as part of a refinancing deal with the Royal Bank of Scotland and to help the business get through the troubled economic times.



The cash injection from Ramsay and Mr Hutcheson came after the firm accrued a bill from VAT, corporation tax and PAYE of around £8 million. This has now mostly been repaid and will be completely settled by the end of this month.



Ramsay has told how he had to sell his Ferrari to help put the restaurant empire back on track, blaming its problems on his own ambitions.



Mr Hutcheson said: "2008 brought its own challenges, not just for our group, but for the industry as a whole and the broader economy.



"Whilst the restructuring has benefited the group, the significant contribution and commitment of all 750 staff to the business has been integral to moving us to a position of strength."



The firm said 25 staff were axed as part of the restructuring efforts.



Of Ramsay's 11 London restaurants, Boxwood, Royal Hospital Road and Claridges emerged as the star performers.



Connaught was closed after its lease expired, but two further restaurants were opened: Murano in September 2008 and York and Albany in October.



The Narrow has had extra seating installed, Petrus is due to move to Knightsbridge later this year after closing last September, Maze has been fully refurbished and Savoy Grill is set to reopen with the hotel in early 2010.



But La Noisette ceased trading in January this year and was described as a "consistently underperforming site".



News of troubles in the Ramsay restaurant empire comes amid a torrid time for the TV chef.



Knives were out for the 42-year-old Hell's Kitchen star after he reportedly called Australian television star Tracy Grimshaw a lesbian and compared her to a pig in front of a 3,000-strong audience at a live cooking show in Melbourne last month.

Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Food & Drink

    Guru Careers: MI Developer

    £35 - 45k: Guru Careers: An MI Developer is needed to join the leading provide...

    Recruitment Genius: Fitness Manager

    £20000 - £22500 per annum: Recruitment Genius: This leisure organisation manag...

    Recruitment Genius: Visitor Experience Manager

    £25000 - £28000 per annum: Recruitment Genius: Delivering an inspiring, engagi...

    Recruitment Genius: Learning Team Administrator

    £17500 - £20500 per annum: Recruitment Genius: They are looking for a great te...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions