Bankruptcy looming for volatile super chef Gordon Ramsay?
Aug 10th 2009 3:00PM
Updated Dec 4th 2009 1:30PM
Ramsay has been forced to cede control of three of his restaurant locations and his bankers have recommended that he file for Chapter 11. Always a stickler for high-quality ingredients and fine preparations, Ramsay has altered menus at his global chain of high-end eateries to eschew caviar and high-end cuts of meat in favor of less juicy and less costly menus featuring humble flank steak and cast-off fish such as fluke.
The fate of Ramsay, who's been forced to pawn his Ferrari and might even have to sell his eight-bedroom London dream house (equipped with a chrome plated stove that cost over $100,000), is neither surprising nor unusual. His best customers, financiers, have not been feeling as festive with many investment banks and hedge funds still struggling amidst the choppy global financial markets. Other upscale restaurant operators, such as Morton's, have also suffered from a shrinking consumer appetite for eating out.
Even banks that are doing well, such as Goldman Sachs (GS) have instituted reductions on expense account activities both to conserve cash and to attempt to preserve what shards of reputation they still retain. The huge decline in global wealth has also pushed many potential Ramsay customers into a lower foodie bracket. You don't blow $500 on dinner for two if your vacation home investment just blew up, right? (And in the case of Goldman, when your own trading desk is besting your customers for profit, it's hard to take them out to a nice dinner.)
As a result, the 42-year-old chef ended his restaurant ventures in Prague, Los Angeles and Paris (the latter of which must have been particularly painful, considering that Ramsay has made his name on nouvelle French cooking). Ramsay and his father-in-law, who serves as CEO of the chef's global restaurant empire, cut headcount by 15 percent and opted for less-lofty main course mainstays such as Amish chicken and monkfish. Ramsay and his father-in-law have put millions of their own money into the chain with Ramsay tapping his considerable fortune amassed not only from restaurants but from TV contracts. Perhaps Mr. Ramsay is due for a more simple pre-dinner apertif -- an Alka-Seltzer, neat.
Alex Salkever is a Senior Writer at AOL Daily Finance. He usually covers cleantech and tech but ventures into food at times.