Gordon Ramsay claims to have emerged from his own kitchen nightmare. The celebrity chef says his company, which was battered by the credit crunch and bad publicity, has made a remarkable recovery and is now set to post profits of £3m this year.
The Glasgow-born chef's business, Gordon Ramsay Holdings (GRH), which includes 26 restaurants and pubs in Britain and abroad as well as cookery books, branded Royal Doulton crockery and a Japanese knife range, was on the brink of financial ruin a year ago after he ploughed millions into restaurants overseas during the economic downturn.
The Gordon Ramsay brand, made a household name by programmes such as Ramsay's Kitchen Nightmares and Hell's Kitchen, was also tarnished by the disclosure earlier this year that a large proportion of meals served at his high-end restaurants were pre-prepared at a central kitchen in London.
Advertisement
In addition, there were disappointing restaurant reviews.
His reputation was further battered after he compared Tracy Grimshaw, an Australian television presenter, to a pig, prompting Australian prime minister Kevin Rudd to brand him "a new form of low life".
Advertisement
But now Ramsay has claimed an unlikely turnaround in his fortunes with a return to profits of about £3m over the past 12 months.
Jo Barnes, his spokeswoman said the company's latest set of accounts, for the year to the end of August, will show that the business has turned the corner.
"We will definitely see a return to profit - a significant one. It will be back up to similar levels to the previous year," she said.
Advertisement
Barnes added that sales would also rise from the previous year, when the business generated just £35.6m - a 14% drop on 2007.
"The individual restaurants, particularly in London, are doing well, business is getting stronger by the day. The problems last year were a lot to do with the fact that they were over-extending themselves to fund international expansion."
Advertisement
Ramsay's business was hit hard by the economic downturn, prompting its banker, the Royal Bank of Scotland, to contact administrators last year about the possibility of taking over GRH after it breached covenants on a £10m loan and £500,000 overdraft.
Administration was narrowly avoided when Ramsay and Chris Hutcheson, his father-in-law and business partner, agreed to inject more of their own money and initiate a restructuring which saw about a quarter of head office staff laid off and loss-making overseas restaurants disposed of.
Two months ago the company - in which Ramsay himself holds 69% - reported an 87% slump in profits for the 12 months to August 2008, totalling just £383,000.
Advertisement
Private companies have nine months from the end of their accounting period to file accounts with Companies House, meaning that GRH has until the end of April before it needs to make public its full set of accounts for the past 12 months.
Barnes said the accounts would paint a robust financial picture of the company when they are published next year.
Barnes added that Ramsay planned to press ahead with expansion - albeit at a slower rate - with two venues opening in Italy in the coming year, as well as reopenings of two restaurants in London.
She said the chef, who opened Michelin-starred restaurant Amaryllis in Glasgow in 2001 but pulled out two years later, would not rule out making a return to Scotland.
Barnes added that there were no specific plans for a new restaurant north of the border.
Philip Beresford, who compiles The Sunday Times Rich List, said the claims of a remarkable turnaround should be taken with a pinch of salt.
"I would need to be 150% convinced that all is going smoothly on the good ship Ramsay, given what has happened and the stresses and strains he has been through," he said.
However, Richard Bent, a senior lecturer in retail and consumer management at Edinburgh's Queen Margaret University, said he would not be surprised if Ramsay's company was about to post a healthy profit.
"It really does know what it's doing. I understand why he is doing all the TV work that he does, but it is very difficult to maintain the image. He has had a lot of bad press, which has taken a shine off the brand and when your brand is a luxury one and you need to make people feel special, you have to be careful."
Ramsay cooks up charity dinner
Gordon Ramsay is to host a gala dinner in Scotland to aid spina bifida sufferers.
The Glasgow-born chef has picked three of Scotland's finest chefs to make a six-course meal for 250 guests at the £500-a-head event in his home city next month.
Celebrities from the worlds of sport, business and entertainment will be able to watch Ramsay on screen as he scrutinises the work of Steven Doherty, Joe Queen and Willie Pike in the kitchen.
It is hoped that the dinner at the Glasgow Science Centre on October 29 will raise more than £125,000 for the Scottish Spina Bifida Association (SSBA), of which Ramsay is patron. The chef became involved with the SSBA in 2004 after meeting a spina bifida sufferer during a charity run.
The evening will also feature a "money can't buy auction" and a raffle. In addition, guests will be offered the chance to join Ramsay in the kitchen.
Deborah Roe, head of fundraising for SSBA, said: "Every year the charity needs to raise over £800,000, so events like this are essential in helping maintain our current level of services while providing innovative new projects across Scotland."
Tickets, priced at £500 each or £5,000 for a table of 10, are available from the Scottish Spina Bifida Association on 01236 794505 or by e-mailing gordon@ssba.org.uk .