Gordon Ramsay is in hot water, as his business goes down in flames
Dec 12th 2009 11:40AM
Updated Dec 13th 2009 7:41PM
The bellicose Brit's failure as a businessman is breathtaking to behold. "In the fall of 2008, his London-based Gordon Ramsay Holdings Ltd. breached the covenants on a £10.5 million [$17 million] loan and overdraft facility from Royal Bank of Scotland Group Plc.," according to Bloomberg News. "In late December, Ramsay says, KPMG recommended that the company declare bankruptcy, fire hundreds of people and close all but its best-performing restaurants."
An Empire Spread Too Thin
For the hotheaded TV star, though, bankruptcy was unthinkable -- which is a pity, because bankruptcy would have been the smartest business decision he could have made. Ramsay could have restructured his debts and perhaps figured out a way to extricate himself from the mess he had created.
But recession or no recession, Ramsay would have gotten into trouble because he had spread himself too thin, between his TV shows on two continents and his cookbook writing. As he repeatedly tells hapless restaurateurs on Ramsay's Kitchen Nightmares, being a chef requires hard work and dedication. But he seems to have forgotten even that lesson: Critics say the quality of his food has slipped.
Ramsay has let his ego cloud his business judgment just when restaurant owners must think clearly: Many high-end establishments have struggled, and quite a few have closed. Imagine the viewer reaction if it was discovered that three restaurants Ramsay "saved" on Nightmares closed anyway. It would be as if a real-estate mogul with financial problems somehow convinced TV audiences to let wannabe businesspeople serve as his "apprentice."
On the Chopping Block: Ramsay and His Restaurants
Further hurting his reputation were allegations in the U.K. media of a seven-year extramarital affair. Adding insult to such injury, the Telegraph this year reported that Ramsay had exaggerated his youthful soccer exploits. And the chef is in hot water with tax authorities and behind in his payments to suppliers.
"In New York, he shut the 45-seat upmarket dining room at lunch to halve staff costs, removed flowers from the tables...and introduced a $40-a-head pre-theater menu to get more traffic through the door," according to the Daily Mail.
Recently, he sold the money-losing Gordon Ramsay At The
Ramsay unloaded his flagship Hollywood location, which still operates under the Gordon Ramsay name, earlier this year. While he retains "creative control' over such dishes as the $18 breakfast sandwich, not much of his empire remains. Seems as if the would-be restaurant entrepreneur is now living in his own private Hell's Kitchen.