Fast-food chain Leon has revealed plans to shut down several of its restaurants as part of efforts to save its business.
The company is set to go into administration after suffering nearly £21 million of losses over the past two years.
It comes only two months after bosses axed nearly a fifth of their workforce, blaming a ‘challenging’ year of weak consumer spending and high inflation of ingredients and other costs.
Weeks later it was bought back from Asda by co-founder John Vincent, reportedly for between £30 million and £50 million – less than half the price Asda bought it for in 2021.
In a statement, Leon said the appointment of administrators was to ‘help accelerate the restructuring of the business’ and that the ‘immediate priority is to reduce the number of loss-making restaurants’.
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It’s not clear how many of its 71 restaurant branches are now at risk.
Some of its 1,000 staff will also lose their jobs, although Mr Vincent said efforts will first be made to ‘find people roles in other Leon restaurants’.
Leon blamed its struggles on a combination of increased working-from-home since Covid and ‘unsustainable’ tax increases.
Mr Vincent said: ‘Today for every pound we receive from the customer, around 36p goes to the government in tax, and about 2p ends up in the hands of the company. It’s why most players are reporting big losses.’
He also suggested the brand’s previous owners had neglected it, writing: ‘In the last two years, Asda had bigger fish to fry, and Leon was always a business they didn’t feel fitted their strategy.
Leon’s statement added: ‘Although he believes that the company drifted from its values under the ownership of EG and Asda, Vincent has been sympathetic to the challenges they had as owners.’
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