Leon, a prominent fast food chain, is undergoing significant changes with plans to close restaurants and cut jobs, following its recent buyback by co-founder John Vincent. This move comes as the company grapples with challenges from shifting consumer habits and economic pressures.
Restructuring and Administration Process
Leon has appointed administrators from Quantuma to lead a restructuring programme, aiming to put the business into administration as soon as possible. This step is intended to help manage debt payments and secure the company's long-term future. The chain, which operates 71 restaurants, is evaluating how many outlets will need to shut, though the exact number of affected roles has not been disclosed.
Background and Ownership Changes
John Vincent, who co-founded Leon in 2004 with Henry Dimbleby and chef Allegra McEvedy, bought back the business in October. This follows a previous sale to the Issa brothers' EG Group in a £100 million deal, which later saw Asda acquire Leon in 2023. However, Leon has struggled under Asda's ownership, with sales falling almost 4% to £62.5 million in 2024 and a pre-tax loss of £8.38 million.
Impact of Work-From-Home Trends
Vincent attributes the need for downsizing to the shift to working from home, which has reduced demand for takeaways. He notes that many peers in the industry are facing similar challenges, with companies reporting significant losses due to changing work patterns and high taxes. Vincent highlighted that for every pound received from customers, about 36p goes to the government in tax, leaving only 2p for the company.
Recent Closures and Changes
Since Vincent's buyout, 10 outlets have already closed, including three overseas franchises. Additionally, Leon plans to discontinue its £25-a-month Roast Rewards scheme from January, which offered subscribers up to five coffees a day and food discounts. In a unique move, staff have been signed up for training in wing tsun, a martial art, aimed at improving coffee-making times while lowering heart rates.
Future Plans and Employee Support
The immediate priority is to close the most unprofitable restaurants, with efforts to find other brands to take on leases or negotiate releases from landlords. Vincent expressed hope to rebuild Leon on its core values and provide more jobs once profitability is restored. For affected staff, the company is looking to place them in other Leon restaurants and has established a scheme for employees to apply for jobs at Pret a Manger.
Brand Evolution and Criticism
Co-founder Henry Dimbleby previously criticized Leon's owners for potentially "destroying the brand" by moving away from its original mission of selling "delicious food that is convenient and healthy" towards unhealthy meal deals. Leon has responded by reaffirming its commitment to making fast food good food—delicious, affordable, and better for you.
Conclusion
Leon's restructuring reflects broader trends in the fast food and retail sectors, highlighting the impact of remote work and economic factors on business sustainability. As the company navigates these changes, it aims to return to its founding principles while adapting to new market realities.
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