Highlights
- Leon considering closures among its 54 restaurants following shift to home working.
- Chain appoints Quantuma administrators after 10 outlets already shut since October buyout.
- Sales fell nearly 4 per cent to £62.5m in 2024 with pre-tax loss of £8.38m.
Fast food chain Leon is planning to close restaurants and cut jobs less than two months after being bought back from Asda by co-founder John Vincent, as the shift to home working continues to impact demand for takeaways.
The chain announced on Wednesday it had appointed administrators from Quantuma to lead a restructuring programme, though it did not specify how many of its 54 restaurants would close or how many staff would be affected.
Vincent, who founded Leon in 2004 with Henry Dimbleby and chef Allegra McEvedy, bought the business back in October, four years after selling it to the billionaire Issa brothers' EG Group in a £100m deal.
The chain has applied for an administration order and aims to enter administration as soon as possible to help manage debt payments while securing its long-term future.
Since Vincent's buyout, 10 outlets have already closed, including three overseas franchises. The entrepreneur has also scrapped Leon's £25-a-month Roast Rewards scheme from January, which allowed subscribers to claim up to five coffees daily and food discounts.
Losses prompt restructuring
The fast food chain's sales fell almost 4 per cent to £62.5m in 2024, when it made a pre-tax loss of £8.38m, according to the latest accounts filed at Companies House.
Vincent pointed that "If you look at the performance of Leon's peers, you will see that everyone is facing challenges, companies are reporting significant losses due to working patterns and increasingly unsustainable taxes."
He added "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."
Vincent stated the "immediate priority" was to close the most unprofitable restaurants, with the group either finding other brands to take on leases or asking landlords to release commitments.
According to Vincent, "Asda had bigger fish to fry" over the past two years, and "Leon was always a business they didn't feel fitted their strategy".
The company would look to find work for affected staff in other Leon restaurants and had established a scheme for employees to apply for jobs at Pret a Manger.
Vincent bought back the chain shortly after Dimbleby told a grocery industry conference that Leon's owners were set to "destroy the brand" by moving away from its original mission of selling healthy, convenient food.
