Leon, the fast-food chain, is entering administration with plans to close several locations and cut jobs as part of a restructuring strategy under its new ownership. Co-founder John Vincent repurchased the company from Asda last month for a reported sum between £30 million and £50 million. This is significantly lower than the £100 million paid by billionaire brothers Mohsin and Zuber Issa in 2021.
The company has applied for an administration order to facilitate a Company Voluntary Arrangement (CVA) aimed at accelerating its restructuring. Vincent stated that the immediate focus is on reducing the number of loss-making restaurants. Leon attributes its difficulties to changes in work patterns due to the Covid-19 pandemic and increased taxes, which have strained both the business and the wider hospitality sector.
Vincent, who believes the company diverged from its values under previous ownership, acknowledged the challenges faced by EG and Asda. He also announced a partnership with Pret A Manger, allowing affected Leon employees to apply for jobs through a dedicated channel. The exact number of locations to be closed and jobs to be cut has not been disclosed, but efforts will be made to reassign staff within the company or provide redundancy payments where necessary.
Vincent has criticised what he describes as an unsustainable tax burden on the industry, noting that a significant portion of revenue goes to the government. He expressed hope that Leon can return to profitability and expand once more by focusing on its core values.
Quantuma, the advisory firm working with Leon, expressed optimism about achieving a favourable outcome for all stakeholders, including creditors, suppliers, and employees. Founded in 2004 by John Vincent, Henry Dimbleby, and Allegra McEvedy, Leon currently operates 71 restaurants, with 44 owned sites and 22 franchised locations.
In September, prior to the sale by Asda, Leon reduced its workforce by 17%, or 224 employees, in response to high cost inflation and reduced consumer spending. The company reported a 3.9% decline in sales to £62.5 million and losses of £8.4 million, an improvement from the previous year’s £12.5 million loss.
