It always felt like a double-edged sword and indeed Simon Blagden, the now former chief executive of the Jamie Oliver Restaurant Group, admitted on more than one occasion that those were the words used internally to describe the pros and cons of running a business spearheaded by the high-profile chef. As of this morning, the man who did more than most to build Oliver’s restaurant empire can finally take a break from that constant scrutiny and let others worry about where the business is headed.
“Jamie’s profile attracts interest. If you go to a new territory overseas you get a lot of interest, as we did here when we started. People driving three hours to one of our first sites, to then queue for three hours, is not a sustainable model. The positives outweigh the negatives, but everything we do has to be squeaky clean. The due diligence around our brand is significant; we can’t cut corners. The phrase we use to our managers and staff is treat everyone like a critic. The rise of social media, and feedback on feedback, has to be respected. Ignore it at your peril.”
So said Simon Blagden to me at the tail end of 2015, months after the company had aborted an attempt to secure external investment in its restaurant arm. If any comment summed up Blagden’s time overseeing one of most stand-out restaurant brands in the UK of the last 15 years, this would be it. The early success; the pros and cons of having Jamie Oliver’s name and reputation over the door; the frustrations of what that entailed, are all laid out or hinted at. Over two years later, the cons and those frustrations have come to an inevitable conclusion. Some will be surprised it has taken this long.
Rewind to 2009’s Retailers’ Retailer and Jamie’s Italian and Blagden, the former M&B executive and PizzaExpress operations director, were being crowned Best Emerging Concept and Rising Star respectively, recognition of the early success of the brand launched in Oxford in 2008. The concept held off competition on the night from Bill’s Produce, Busaba Eathai, Byron, Cote, Gusto, Taybarns, and Wahaca, which highlighted the strength of the brands coming through.
Two years later, Blagden picked up the top individual award, the Retailers’ Retailer; whilst Jamie’s Italian won the best concept award and Oliver was named best investor, with his core brand joined by fledgling concepts Barbecoa and Recipease.
The Jamie’s Italian business was at that time a stunning success and the stand-out growth brand in the eating-out and drinking-out market. At a time when other so-called celebrity chefs were not exactly covering themselves in glory, Oliver had recognised the importance of recruiting talent and expertise – people who know about the business of running multiple-site operations – Blagden had been recruited by non-executive director Ian Neill and aided considerably by the then group chief executive John Jackson. By June 2013, the 33-strong concept was understood to be delivering weekly sales north of £65,000 per site, or more than £120,000 in the case of Covent Garden and Gatwick.
Whilst Blagden always said that 45 restaurants under the core brand would be the optimum number for the group in the UK, it didn’t stop Oliver and his team looking at further concepts and versions of the Jamie’s Italian format. Barbecoa, launched in One New Change, St Paul’s in October 2010 with US chef Adam Perry Lang, is still with us. A second site under the concept opened last year in Piccadilly but a third at Nova Victoria has been shelved. As with Jamie’s Italian, its future expansion opportunities will be focused in the majority overseas.
Then there was the confused thinking behind the Union Jacks concept. Launched in 2011 in the Central Saint Giles development in London’s West End, as a partnership between Oliver and Arizonan pizza expert Chris Bianco, the “British flatbread concept” may have had a great name, but the fact it wasn’t pizza-based confused consumers and critics alike. It never gained the momentum of its sister brand, even when the company relented and rebranded itself as a purveyor of flatbread pizzas. The last of the five sites opened under the concept in Covent Garden, closed earlier this year. It was the first misstep by the high-profile chef and his team.
There was more focussed thinking behind the introduction of the smaller Jamie’ Trattoria format. At a development cost of about half the usual £2m cost of a Jamie’s, the format was viewed as being able to give the brand scope for development across the country on a much wider scale. It launched three Trattoria sites in Richmond, Tunbridge Wells and Chelmsford, but as Blagden admitted it never found its own identity and evolved to become too close to the core brand. All three have since been closed or sold.
Although an IPO had been mooted as a possible destination for the business as far back as 2010, the company waited until the middle of 2015 to review its funding options. The company, which at the time was valued at c£200m, said it received plenty of interest, indeed the Hony Capital-backed PizzaExpress was believed to be one of the frontrunner, but in the end decided to remain self-funded.
As Blagden said at the time, “to be frank we couldn’t find the right partner. Where we need help is going into the States with confidence and with developing an international franchise business. A lot of the investors were typical restaurant investors more comfortable with a cookie-cutter type of model, but ours is highly entrepreneurial and complicated. That makes the process more difficult, so the right match was hard to find”. It was thought any new funding deal would have seen Blagden take his leave from the business soon after, but he has stayed on and steered the company through a difficult 18 months.
Some questioned whether a drop in performance in the UK had also had an impact on the level of interest, and there has been some inevitable decline in performance from the business over the past few years as the rest of the sector has played catch-up and competition has increased. Blagden admitted earlier this year that the early days of the business were characterised by a bullishness that is no longer present. It has been a chastening 18 months, culminating in the company’s decision at the start of this year to close six underperforming sites, Brexit was mentioned in the official release that announced the closures and a barrage of criticism followed – the negative side to that double-edged sword, again throwing into focus the challenges that come with running a brand so closely associated with a major public figure.
Blagden admitted it wasn’t a great couple of weeks for the business, even if it was a necessary business decision, allowing the company to concentrate on its high-footfall, prominently located sites.
Talking to MCA’s sister title Restaurant magazine earlier this year, Blagden said that what most surprised him about the Brexit episode was the amount of pent-up hostility for Oliver and his business. Many people used it as an excuse to air grievances, in some cases, linking the brand’s closures with poor food and service. It got personal.
“If another major chain had sold off a handful of underperforming sites, nobody would have batted an eyelid. I believe Jamie is a force for good – 80% of people love him, but the remaining 20% don’t feel that way. And 20% of the UK is an awful lot of people. Jamie’s name raises a lot of awareness about the business, but it’s also something that needs to be protected and looked after. When we set up the business 10 years ago, the first thing I promised him is that we would only enhance his reputation. The odd hiccup aside, I think we have done.” However, at that time it felt like Blagden was getting tired of fighting that good fight, not that it showed in his loyalty to the business.
At the time of the announcement he told MCA that it had taken the company 18 months to get its Jamie’s Italian business into good health and that the closure of the six sites was the “last part of that puzzle”. He admitted that the first six months of 2016 was tough for Jamie’s, but the second half of the year was “pretty good”. But in the background was the impact those closures and the general softening of the market would have on the company’s full-year results. A £10.9m hit from the closures saw Jamie’s Italian slump from a full-year pre-tax profit of £2.4m to a loss of £9.9m.
This was followed by news that further cost cutting would take place, with Jamie’s Italian is to be brought under the same management as that of Jamie Oliver Holdings, the television and book publishing business, at a new corporate headquarters on Holloway Road in north London. It was no surprise that Blagden’s days at the coming would be coming to an end, although the speed at which it happened was still unexpected for some. It was thought that Blagden would be staying on until the start of next year, when it is thought, that he, along with other shareholders would be due a pay out from the business. However an email to Jamie Oliver’s staff yesterday revealed he was leaving with immediate effect.
His duties will now pass to Jonathan Knight, the company’s international managing director for restaurants, who joined the group at the start of 2016. Knight, the former chief executive of Al Khayyat Investments (AKI) Retail Division in Dubai, has previously helped the likes of Supergroup, Holland & Barrett and most recently Fortnum & Mason enter the Middle East. Previous to that, he was a franchisor at Marks & Spencer (M&S) for a number of years.
The company opened its first overseas Jamie’s Italian in Dubai in 2011, and over the last six years grown its international presence to c30 sites, from Brazil to China, and Russia to India. It will open 18 further international restaurants this year and it will be this part of the business that the company will focus on over the coming years.
This will include opening Jamie’s Italian franchises in territories including Mexico and China, where a commercial tie-up with Alibaba, the giant internet retail group, is under discussion, the company is also in talks about franchising Barbecoa, its barbecue steakhouse concept, in Thailand and Hungary.
Overseas growth will be achieved in part through its Jamie’s Pizzeria, Jamie’s Deli and Jamie’s Diner sub-brands and through its growing relationship with SSP. Indeed, I understand that one target for the company is to have 100 further restaurants opened internationally in the next four years.
One target that eluded Blagden was a launch of the brand in the US. It was always believed that this would be a company-owned venture but Knight hinted earlier this year that the company may explore a franchise route, if the right partner could be found. While international expansion for the business looks set fair, challenges will remain in its home market. The Italian casual dining segment is coming under increasing pressure, as Carluccio’s and Strada are also finding, whilst it feels like there is some consumer fatigue with celebrity chefs. Knight will be faced with a holding operation in the UK.
It will be interesting to see whether Blagden will get tempted back into the sector into a top role. I’m sure after nearly 10 years at the head of the rollercoaster that has been the Jamie Oliver Restaurant Group he will want to take a well-deserved break from the spotlight and Oliver’s 4am business idea texts that he often received. For a number of years he was the man on the tiller of one of the biggest success stories this sector has seen and still one of its most high-profile brands both nationally and internationally, it would be a shame if his experience and expertise were lost to the industry for good.
