Leon to axe restaurants and jobs as administrators hired

Leon has said it will shut a number of restaurants after appointing administrators to lead a major restructuring.

The fast food chain said it will cut jobs as a result, as its boss criticised the hospitality industry’s “unsustainable” tax burden.

It is understood the company has not yet decided exactly how many restaurants will need to close or how many workers will be affected.

Leon was founded in 2004 by John Vincent, Henry Dimbleby and Allegra McEvedy.

The chain runs 44 company-owned restaurants and has 22 franchised restaurants.

The group has hired advisers from Quantuma after applying for an administration order.

It said it will then form proposals for a company voluntary arrangement (CVA) restructuring plan in order to overhaul its operations to help secure the brand’s long-term future.

However, the firm said an initial review highlighted a need to “reduce the number of loss-making restaurants”.

Leon and Quantuma will discuss their plans with landlords and lay out options for the future of the business amid hopes it can emerge from the restructuring process as a “leaner business”.

It comes almost two months after co-founder Mr Vincent bought the business back from previous owner Asda.

Leon was sold to Mohsin Issa and Zuber Issa’s business EG Group in 2021 before becoming a part of their Asda business in 2023.

The company came under pressure from “internal challenges”, changing habits from commuters linked to the pandemic and tax increases.

The returning boss said the chain “drifted from its values” under the ownership of EG and Asda but said he is sympathetic to the challenges faced.

Mr Vincent said: “In the last two years, Asda had bigger fish to fry, and Leon was always a business they didn’t feel fitted their strategy.

“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.”

The business has created a programme to support anyone made redundant from store closures.

Mr Vincent added: “In the first instance, we will look to find people roles in other Leon restaurants.

“Where that is not possible, for example if there is no Leon restaurant within commuting distance, people will receive redundancy payments.

“In addition we have established a programme with Pret A Manger where affected Leon employees can apply for jobs via a dedicated channel.”

Leon’s grocery product business will not be affected by the restructuring.