Back of the House

How Gordon Ramsay’s Bubble Burst

Photo: Getty Images

“We weren’t unlucky. We were clumsy. We’d put too many risks in front of us with too much confidence that nothing would fail,” confesses Gordon Ramsay Holdings CEO (and Ramsay’s father-in-law) Chris Hutcheson in a lengthy Bloomberg piece that tracks Ramsay’s ascent to a household name and subsequent financial fall in 2009. Last year, Ramsay generated $9 million from his U.S. talent fees, £3 million from product endorsements, $50 million from cookware and appliances bearing his name, and £2 million from his British television shows. So how did he wind up with an advisory group recommending that “the company declare bankruptcy, fire hundreds of people and close all but its best-performing restaurants?”

Too much growth too fast, and not enough planning: the company’s employee count soared from 45 to 1,250 in ten years and Hutcheson freely admits that he and Ramsay didn’t take local behavior into account while planning new restaurants, erroneously assuming, for example, that New Yorkers would be apt to drink heartily at lunch. After closing his Prague restaurant and ceding the control of five others to a private equity firm in exchange for a consulting fee, Ramsay’s back in the black, but changes have been made: “In London, his bistro Foxtrot Oscar has closed on Mondays and Tuesdays. Stuart Gillies, his head chef at Boxwood Cafe in The Berkeley, has saved 1,500 pounds a month by no longer ordering flowers, and he now uses cheaper cuts of meat, such as beef shoulder, that he says require more skill to prepare.”

Gordon Ramsay’s Recipe For Redemption [Bloomberg]

How Gordon Ramsay’s Bubble Burst