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Jamie Oliver spent $16.5 million to save his failing business. Here's what it taught him

Chef and businessman Jamie Oliver  speaks onstage at the Edelman seminar  during the Cannes Lions International Festival of Creativity on June 23, 2015 in Cannes, France.
Richard Bord | Getty Images
Chef and businessman Jamie Oliver speaks onstage at the Edelman seminar during the Cannes Lions International Festival of Creativity on June 23, 2015 in Cannes, France.

Celebrity chef, bestselling author and restaurateur Jamie Oliver has his fingers in plenty of pies. But like most serial entrepreneurs, he's been burned a fair few times.

In 2015, he revealed that he'd messed up around 40 percent of his ventures. But his greatest setback came in 2017, with the near collapse of his restaurant chain, Jamie's Italian. Oliver had to pump £12.7 million (around $16.5 million) of his estimated £150 million fortune into the company to help save it from the brink of bankruptcy, according to a recent interview he did with the Financial Times.

"I had two hours to put money in and save it or the whole thing would go to s--- that day or the next day. It was as dramatic as that," Oliver told the FT.

Here are four reasons for the near collapse and what they taught him about running a business.

1. Take time to get it right

Restaurant chain Jamie's Italian was launched in 2008 to bring "new on-trend ingredients" to the U.K.'s mid-market dining scene. That helped position Oliver as a pioneer in a burgeoning market, but it also meant he faced tough new challenges and ended up "opening too many restaurants, too quickly, in the wrong places," the celebrity chef told the FT.

"In the future, I might spend a bit more time getting in second and getting it right," he said.

2. Grow strategically

Part of that push to be first saw Jamie's Italian expand rapidly, reaching 40 U.K. outlets at its peak.

However, that led to some poor venue choices in "sub-optimal" locations, Will Wright, a partner at KPMG who was brought in to help restructure the business in 2017, told the FT.

High rents, increasing food costs and rising wages quickly made many of those locations unprofitable and contributed to company debts of £71.5 million. To keep the business afloat, Jamie's Italian has since had to close 12 branches and cut around 600 staff, according to media reports.

Jamie Oliver appears on NBC News' 'Today' show
NBC NewsWire | NBCUniversal | Getty Images
Jamie Oliver appears on NBC News' 'Today' show

3. People are essential

Oliver, who left school at 16, has often said he relies heavily on others to help with the day-to-day running of his businesses. "Don't forget that my day job's doing 'jazz hands' and making content for television and books. I can't do everything," he told the FT.

That's common for entrepreneurs, particularly celebrities. However, media reports about Jamie's Italian raised questions about the suitability of those he appointed, hurting Oliver's reputation in the process.

4. Success is not guaranteed

By the time Jamie's Italian was set up, he already had an established following from his TV shows, cookbooks and flagship restaurant that hires underprivileged teenagers, Fifteen. Yet that did not lead to guaranteed success for his new venture.

"The customer would go and buy Jamie's latest book, would sit at home and watch Jamie on Channel 4, but then he or she would go out to eat at Prezzo (a competitor restaurant chain). That was our problem," Jon Knight, who was brought in as CEO of the Jamie Oliver Restaurant Group in 2017 to help rebuild the flailing business, told the FT.

The business is now attempting to bridge that disconnect by lowering prices to bring it in line with the rest of the Oliver brand.

Not giving up

Despite the setbacks, Oliver said he remains committed to his restaurant business and plans to rebuild it as he learns from his earlier failings.

"With Jamie's Italian, we kind of got halfway there and then it all ran away," he told the FT. "Now I am a bit more confident. We're beginning to see a little bit of light at the end of a very dark year."

For more on Jamie Oliver's business journey, read the full article in the Financial Times.

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