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Gordon Ramsay backs out of the Big Apple as unions bite
Jonathan Prynn, Consumer Business Editor3 Dec 2009
Gordon Ramsay has admitted defeat in his £5million bid to conquer New York after suffering three years of heavy losses.
The celebrity chef is handing over control of the two Michelin-starred restaurant, Gordon Ramsay at the London, to the operators of the Manhattan hotel where it is based.
It also emerged today that the long-awaited reopening of his Petrus restaurant is delayed because of problems with the wiring at its new Knightsbridge location.
Although the New York dining room will keep the Gordon Ramsay name under licence, the handover marks an end to his hopes of owning a global restaurant chain.
All his foreign restaurants, including those in Paris, Los Angeles and Prague are now operated as "franchises" under licence rather than owned by his company.
Gordon Ramsay at the London has been in the red ever since its launch in December 2006, only months before the start of the credit crunch.
Reviewers were lukewarm and the chef has admitted he badly underestimated the difficulties of making money in highly unionised New York, where staff costs account for 65 per cent of turnover. The cash haemorrhage was said to be running at around £3,000 a month. Problems included the unions' insistence that staff be paid weekly instead of hourly, and the near impossibility of getting rid of employees, according to a source at Gordon Ramsay Holdings.
"At least it means that another cause of losses has been sealed off and all the UK restaurants are booming," the source said.
Ramsay told the Standard that losses in New York had been almost wiped out but there was little chance of the restaurant ever making a profit. He said: "It is 100 per cent not closing. The restaurant does really well but the day-to-day responsibility is going to revert to the hotel. It's just a switch in the way it's run."
Restaurant commentators said the move was another sign the Ramsay business empire had lost its way. One said: "He keeps making such basic ABC mistakes. A child of three would have known about the unionisation of the New York restaurant scene."
Ramsay has said his overseas expansion plans, which almost forced the business into administration earlier this year, were too ambitious.
Reader views (8)
I have total respect for Gordon Ramsay. People might not like his style, but at least he pushes his staff to do their best. He is a bit like a Seargant Major and a tough coach. He pushes people to their best and demands the highest standards.
As for the US, well a lot of British companies have failed going to the US. Just look at Tesco.
- Anonymous, London, 04/12/2009 00:43
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Oh and by the way the best steak I have ever had either here or New York was at Maize Grill, still dreaming about it.
- Tallualah, Chelsea, 03/12/2009 21:16
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Good luck Gordon, I fear he went too big too soon, classic mistake in business.
- Tallualah, Chelsea, 03/12/2009 21:14
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Somehow I feel Gordon Ramsay is a very good cook.
- Georgie, Islington, London, 03/12/2009 20:54
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I can't understand this. It's the same for all the other successful restaurants in New York. I like Gordon, but this sounds like not doing your homework to me.
- Chris, London, 03/12/2009 19:14
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From what I read it was more than the unions that made the Ciprianis flee. Thankfully they have nothing to do with our Cipriani who may be playing for Wasps again in the near future.
- Jack Spratt, Richmond, Surrey, 03/12/2009 18:39
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Oh dear. Now why am I not sad?
Bully bullied by bigger bullies.
- Ricky, Hackney, London, 03/12/2009 16:38
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Yeh look what happened to the 'Cipriani' family when they tried to get rid of the unions, they ended up fleeing the US.
I am no fan of GR but I did stay in the London hotel and ate in his restaurant. I have no idea what beetroot starter thing I ordered was, but it tasted like heaven!
- Laura, dublin, 03/12/2009 15:22
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