http://www.telegraph.co.uk/news/newstopics/celebritynews/5723892/Profits-at-Gordon-Ramsays-restaurants-fall-sharply-as-debts-mount.html


Profits at Gordon Ramsay's restaurants fall sharply, as debts mount
Gordon Ramsay faced accusations that his restaurant empire was in serious trouble yesterday after his latest set of accountants showed profits fell by 87 per cent last year and his debt grew fourfold.


 The celebrity chef saw four of his London restaurants close between December 2007 and January 2009  Photo: PA

The figures suggested the celebrity chef suffered a tumultuous 12 months during the last year, as he struggled to pay mounting tax and supplier bills in the face of declining revenues.

The poor figures cap a terrible few months for the chef and television personality, who has faced allegations of an extra-marital affair, been condemned for serving “ready meals” in his pubs and whose flagship restaurant crashed out of the list of the 50 best restaurants in the world

However, he insisted that after a major restructuring – closing some overseas ventures and injecting £5 million of his family’s own money into the group – Gordon Ramsay Holding’s was on course for a more profitable year in 2009.

He said: “The year was tough on our group and all involved, as well as the rest of the economy that faced a spiralling downturn. We have re-grouped and learnt some valuable lessons, and the business has now returned to a position of strength.

“We are back on solid ground and I am very confident that we have a bright and profitable future ahead of us, particularly looking ahead to the re-opening of Pétrus in the autumn and The Savoy Grill early in the New Year.”

The accounts, for the year to August 2008, indicated pre-tax profits fell from £3.01 million to £383,000 after turnover fell by £6 million to £35.6 million.

The company said the fall in turnover and profits was down to the closure of the Savoy Grill due to the hotel being closed for refurbishment, and the closure of his restaurant at the Connaught, after Ramsay and the hotel owners fell out.

The restaurants that remained opened all year increased their turnover by 11 per cent, the company said, with diners showing no sign of tightening their belts.

Restaurant experts, however, said the company had lost its once invincible reputation.

Peter Harden, co-founder of Harden’s restaurant guide, said: “Two years ago we thought he had reached a peak. And since then Gordon has redoubled his media commitments. We see no reason to change our view – he needs to focus more on his restaurants and his cooking, and less on his overseas ventures and television performances.”

The accounts reveal the company renegotiated its loan with its main lender, Royal Bank of Scotland, increasing it from £2 million to more than £8 million, but even that was not enough to cover mounting bills, the accounts suggest.

During the year he owed £2.9 million of taxes and social security costs to HM Revenue & Customs and more than £5.5 million to suppliers. He took on average 113 days – nearly four months – to pay his suppliers, many small butchers and vegetable distributors, who complained the slow payments caused them to run into trouble. In the accounts, the company thanks suppliers “who have continued to be extremely supportive of the business”.

Since the year end, Ramsay and his father-in-law Chris Hutcheson – who runs the company on a day-to-day basis – have injected £5 million into the company as part of a major restructuring.

Many believe that following the closure of his restaurant in Prague, and handing back control of his ones in Los Angeles and Paris, he will be able to survive the recession better than some rivals.

However, Ben McCormack, editor of the London restaurant guide Square Meal, said there still clouds on the horizon. “I don’t think he is in serious trouble any more. But he no longer causes excitement on the restaurant scene in the way that Heston Blumenthal does. His food is out of step with the times, with people wanting simpler fare.

“And I also think that is media personality – all that aggression and swearing – puts a lot of people off. Diners want something softer.”