Bankruptcy Narrowly Avoided by Celebrity Chef

Dec 15

Bankruptcy Narrowly Avoided by Celebrity Chef

Chef Gordon Ramsay is accustomed to ordering around his underlings and setting faltering restaurateurs on the path to better business.

Recently, though, his company has had to face the same hardships as so many companies across the world have, battling the recession and downturned markets. Those hardships could easily have been folded up and packed away in the past year. In fact, Ramsey received direct advice from financial consultants to do just that.

Advisory firm KPMG was brought in to perform an independent review of Gordon Ramsay Holdings Ltd. after the chef’s company failed to meet the demands of a loan from a Scottish bank. In late 2008, as a result of the review, KPMG suggested that the company file for bankruptcy. Furthermore, it advised that Ramsay fire hundreds of staff, and close the restaurants that weren’t performing as well as others.

Everything was on the line, Ramsay told Bloomberg in a recent article outlining his harrowing journey to the brink of financial unrest. He called the months following that advice the worst he’d ever experienced professionally.

What was on the line were the features of Ramsay’s holding company: about 20 luxury restaurants in locations around the world, from Dubai to New York. In addition to that, he stars in television shows, publishes cookbooks and sells branded products like cooking utensils and dishware.

Filming TV shows in the morning, and navigating his business through the dangerous straits of near-bankruptcy, Ramsay refused to give in. There was no [expletive] way that was ever going to happen, he said of bankruptcy in his trademark bawdy language. That was never even an option.

Ramsay’s stumblings as a company may have been the result of overaggressive expansion. His business partner and father-in-law Chris Hutcheson said we weren’t unlucky. We were clumsy. We’d put too many risks in front of us with too much confidence that nothing would fail.

Bankruptcy would have meant an embarrassing decline for a celebrity chef who made his television name by saving restaurants that were in trouble.

While he’s faced his critics, Ramsay is well-known for his hard work, his artistry and his professionalism. During the most trying times, the hot-head celebrity had to get down to brass tacks, renegotiating where necessary and following his head rather than his heart or his ego when making business decisions.

By cutting costs and pumping his own private savings into the company, Ramsay was able to avoid bankruptcy, and Hutcheson says the worst is over.
Ramsay into one to slow down, though. There are plans for Ramsay to continue working in television, opening revamped restaurants and working to improve and expand the company.

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