Episode Details

Jamie Oliver lost £25m trying to rescue restaurant chain but what has he learned from failure?

A lot of authors and motivational focus on successful people like Richard Branson, Steve Jobs and Warren Buffett. They talk about copying the habits of successful people, learning from successful people and that’s all fine.

But you can also learn from failure. You can learn from bad habits as well as good habits and you can learn from other people’s mistakes rather than making your own.

A good example is the recent collapse of UK Jamie Oliver’s restaurant empire. The business not only went under, Jamie sunk £25 million of his own cash trying to save it.

I assume that he had no personal liability for the business debts, so he could have just walked away and let it go instead of throwing good money after bad.

However, I’m not sure if Jamie has learned from his own mistakes and doesn’t seem to accept that he even made any apart from being misled by his management.

In a recent interview for the Times, the TV chef blames high rents, or the landlords, business rates and competition from delivery services like Uber Eats and Deliveroo for the downfall of his business, which saw the closure of 22 restaurants and the loss of 1000 jobs.

Whilst the above list might be factors in the story the decline of the business, they are just external factors.

He does not seem to accept that he and poor management had a hand in the mess, although he admits that the “wool was pulled over his eyes” and he had “poor advice”. I’m not sure if that is more in relation to him pouring in £25 million of his own cash to save a sinking ship rather than the mismanagement of the business prior to it going into administration.

A good leader takes the blame as well as the credit for the success or failure of business.

Either way, he’s blaming someone else. To be fair, he might not be able to bare his soul in public, as we are not very forgiving towards failure in this country. Privately he might just be saying, “sorry I screwed up” or words to that effect!

If he felt that rents were high in the prime spots he took on, why did they sign those leases for over 22 restaurants in the space of a few years?

When you sign a lease, you must look at all the clauses and rent review periods and look forward to project future rent rises.

Landlords have businesses to run too. Whilst people may not have any sympathy for what they often called “greedy” landlords, it should be remembered that many of these prime city centre buildings and shopping malls are owned by your pension funds. If they go down, so does your pension.

If rents are too high, the buildings would not be let or the landlord would not be able to find tenants.

There is some evidence that we could be reaching saturation points for shopping developments and maybe rents are too high. Primark are now asking for 30% reduction in rent because of deals done with administrators for companies which have renegotiated rents.

Regardless of that, Jamie took on these leases in prime areas at top rents whilst riding the crest of a wave.

There would have been a lot of competition for these spots and I’m sure the landlords felt that Jamie Oliver was almost a prime blue-chip tenant and good for the rent. Landlords will be left sitting on empty premises with long rent voids. Nobody ever mentions that the landlords might have mortgages to pay when these high-flying businesses come crashing down to earth with a bang.

I was also a commercial landlord and know what it’s like when a tenant pulls the plug.

As for business rates, they are a known fixed cost which would have been factored into the business plan from the start. Not