Gordon Ramsay has publicly admitted for the first time that his restaurant business came close to collapse earlier this year.
Speculation was rife in January that Gordon Ramsay Holdings (GRH) had breached covenants on a £10m loan and £500,000 overdraft with Royal Bank of Scotland, but this was dismissed at the time as “completely inaccurate” by Ramsay’s representatives.
However, Ramsay has now broken his silence on the matter, revealing that auditors at KPMG – called in by RBS - had recommended putting GRH into administration after discovering that the business was losing millions of pounds on its overseas expansion plans.
A separate investigation by HM Revenue & Customs found that the company owed £7.2m in taxes.
“We went over our overdraft limit and we did not hit revenue targets,” Ramsay told The Sunday Times. “It was the worst bollocking ever - they told me I was fu**ed. They said we should plan for administration. That it would be smoother for everyone.”
KPMG wanted to take control of GRH to “cherry-pick the winners and say goodbye to the losers”, Ramsay said.
The revelations highlight the motivation for GRH giving up control of its restaurants in Paris, Los Angeles and Prague to the hotels they are housed in.
Other steps included reducing the number of covers in other restaurants, sacking a quarter of the staff at the London head office and Ramsay and GRH chief executive Chris Hutcheson sinking £5m of their own money into the company. They used the cash to pay off debt and most of the £7.2m in outstanding taxes.
“It’s been very painful,” Ramsay said. “It’s taken several million pounds of my own money but I’m still standing.”
Ramsay expects KPMG, which is finalising its report on GRH for RBS, to give the company a clean bill of health.
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By Daniel Thomas
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