Leon to close stores and cut jobs in restructure

Leon has announced it will close several of its restaurants and make redundancies as part of a major restructuring of its High Street food chain.

The company appointed Quantuma as administrator after Leon’s original co-founder John Vincent reacquired the company from Asda last month.

The move puts the future of the worst performing of the 71 stores at risk, but so far no closures have been confirmed and all stores remain open.

The company employs about 1,000 staff and Leon did not say how many workers would be affected, but added that he would initially try to find work in stores that remain open.

Mr Vincent said the “immediate priority” following an initial review of the company was to close the “most unprofitable restaurants”.

“In many cases we have found other brands to replace us, and in other cases we will ask landlords to take back their leases and find operators that are more suitable for them,” he said.

To assist staff who are unable to get jobs at other Leon outlets, Leon has also developed a scheme with Pret A Manger where affected staff can apply for jobs at the coffee chain.

The company’s plan is to work with Quantuma in the coming weeks to discuss plans with homeowners and work through options for Leon’s future.

Mr Vincent said he believed the company had strayed from its core values ​​under the leadership of EG and Asda, but he also sympathized with the challenges they faced in running the “healthier” fast food chain.

“Over the last two years Asda have had bigger fish to fry and Leon’s has always been a business that they felt didn’t fit their strategy,” he said.

“If you look at the performance of Leon’s colleagues, you will see that everyone is facing challenges, with companies reporting significant losses due to working patterns and increasingly unsustainable taxes.”

Asda has previously said selling Leon back to Mr Vincent would allow it to refocus on its core retail operations, which include everything from supermarkets to oil depots.

Asda has been contacted for comment.

Leon also cited internal difficulties, changing working patterns caused by the Covid pandemic and tax increases as the reasons for the current problems; all of which have impacted the hospitality industry more broadly.

Mr Vincent said the government needed to review the tax burden it was placing on the hospitality industry.

“Today, for every pound we receive from the customer, around 36 pence goes to the government in tax and about 2 pence goes into the hands of the company. That’s why most players are reporting huge losses,” he said.

Known for serving his meals in cardboard boxes with brown rice and fresh herbs, Leon said his mission is to prove it’s possible to serve fast food that “tastes good but is also good for you.”

It opened its first branch in London in 2004 and at that time stood out with the fried chicken, burger and fries menus of rival fast food chains.

Leon’s management move follows Pizza Hut’s announcement that its UK operator, DC London Pie, had taken on the role. Closure of 68 restaurants and 11 delivery points It resulted in the layoffs of more than 1,200 workers in October.

DC London Pie has been hit by a combination of “challenging trading conditions and rising costs”, including “tax-related liabilities”, administrators said.