Where it all went wrong for Jamie Oliver's business empire

Where it all went wrong for Jamie Oliver's business empire

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On Tuesday, news broke that one of the world’s most famous chefs was in the middle of an unprecedented business crisis. After dominating British food for almost two decades, Jamie Oliver found himself confronted with a collapsing empire and the scrutiny of the global media. Reports began to circulate that assets including high street mainstay “Jamie’s Italian”, “Barbecoa” and “Fifteen” were all under threat. Some even suggested that banks were preparing to go after Oliver personally to collect what was owed. The current situation is obviously far from ideal for a man many believe to be worth upwards of $400 million.

Given how successful and ubiquitous Oliver has been both home and away, the news of such a spectacular fall has come as a shock. The dramatic disintegration puts an estimated 1,300 jobs at risk, threatening far more people than the business’ famous head. Publicly, Oliver has been quick to blame "the well-publicised struggles of the casual dining sector and decline of the UK high street, along with soaring business rates," for his company’s struggles. His creditors at KPMG have mumbled their agreement. However, if you look a little closer at the background to the collapse, it becomes clear that the empire’s demise cannot simply be explained by the inevitable unpredictability of the market.

Thanks to his energetic, roguish personality, it was obvious that Oliver was destined to be a star in the modern age of foodie celebrity. First breaking through in an unscripted scene for a BBC film about the famous River Cafe restaurant, he has gone on to front campaigns, launch dozens of cookbooks and star in a succession of award-winning TV programmes. This was all in addition to overseeing an operation that, at its peak, presided over an estimated 50 restaurants.

It has been apparent for some time to those in the know that Oliver’s casual chain-dining specialism was under growing threat. The last few years have seen competitors such as Byron Burger, Zizzi’s and Prezzo all struggle to stay relevant in a market where diners are arguably more discerning than ever. Italian chain Strada, once considered serious opposition to Oliver, has been forced to close all but three locations. This lends weight to the idea that the collapse had more to do with external pressure than internal mismanagement.

However, if you speak to those at the heart of Oliver’s business, it becomes clear that there was more at play than changing tastes. In an interview with the BBC, a 27-year-old ex-employee at Jamie’s Italian, who wished to remain anonymous, revealed that there were concerns among the staff long before the current crisis. She pointed to the fact that not only were the restaurants “far too big”, but that extensive campaigns with discount voucher services such Groupon, "didn't inspire loyalty or regular customers". This meant that much of the businesses revenue was reliant on short-termism, rather than more comprehensive relationship building.

And then there were the reviews. In 2008, The Guardian’s restaurant critic Matthew Norman said that if Oliver could expand on the template of his early “Jamie’s Italian” restaurants, "he will soon be driving a prize herd of recession-proof cash cows across the land." Times have changed. The attitude to the comforting mediocrity of mid level restaurant chains has transformed from apathy to hostility. After an early flood of positivity, critics have gone on to label Oliver’s food everything from “disappointing,” to "Appalling, a honking, salty swamp,” in one particularly fearsome write up from The Times’ Marina McLoughlin. This type of publicity is obviously not ideal if you want to attract excited new customers.

But, beyond the snarky comments of professional critics, perhaps the model’s biggest issue was pricing. Jamie Oliver built his brand around friendly, fuss free eating that was hearty and healthy in equal measure. But perhaps most importantly, his food was also essentially affordable. This made the decision to charge top end prices for polished fast food all the more baffling. Unlike other competitors aiming to satisfy the cheap and cheerful demographic, Oliver’s restaurants were saddled with fees that they often couldn’t justify. As a result, they languished on review aggregators such as TripAdvisor and generally failed to generate a buzz from those who occasionally paid a visit. The price was a failure to generate repeat bookings and ultimately growing overly reliant on those who hadn’t heard much about the chain before walking through its doors.

There is no disputing that Jamie Oliver is both an able chef and a talented businessman. It’s impossible to build anything worth $400 million without a head for enterprise and an understanding of what it takes to be a successful entrepreneur. However, the demise of a chain once touted as “lavish”, “outstanding” and “sublime” by a presumably heartbroken Guardian critic proves that it’s not enough to have a model and stick to it. The modern food industry is flexible and dynamic. New threats and new fashions emerge at a moment’s notice. What was once relevant can soon seem decrepit. The independent, more agile beneficiaries of Oliver’s present troubles should pay close attention - the same can happen to anyone if you aren’t on your toes.