Leon Fast Food Chain Slashes Hundreds of Jobs and Closes Dozens of Branches
The popular fast food chain Leon, renowned for its halloumi dishes and waffle fries, has confirmed the loss of hundreds of positions and the closure of multiple outlets across the country. The company entered administration in December, attributing its financial difficulties to what it describes as 'unsustainable' tax burdens within the hospitality sector.
Administration Update Reveals Significant Staff Reductions
Administrators Quantuma Advisory provided an update indicating that Leon currently employs 573 staff members, a figure that reflects the axing of 244 roles. This reduction comes alongside the shuttering of 22 branches, marking a severe contraction for the once-thriving brand.
Draft financial figures paint a grim picture of Leon's recent performance, with losses reported at £12.5 million in 2023, £8.3 million in 2024, and nearly £10 million projected for 2025. These struggles have persisted since the chain was acquired by EG Group, the owner of Asda, in 2021 for approximately £100 million.
Co-Founder Repurchases Company at a Steep Discount
In a significant turnaround, co-founder John Vincent repurchased Leon from EG Group last October at a substantially reduced price. While the exact terms were not disclosed, reports suggest Vincent paid between £30 million and £50 million, far less than the original purchase price paid by the Issa brothers, Mohsin and Zuber.
The sale encompassed 46 Leon restaurants, 20 UK franchises, and additional franchise sites in the Netherlands and Italy. Vincent has since pointed to 'increasingly unsustainable taxes' as a core reason for the firm's financial woes, criticising recent national insurance hikes under what he termed an 'incredibly toxic tax regime'.
Industry Challenges and Future Prospects
Leon's difficulties are compounded by broader industry challenges, including shifting commuter habits post-pandemic and internal operational issues. Vincent has expressed hope that the chain can return to profitability and create more jobs in the future, but he has also warned that restaurants might 'disappear' under current economic pressures, with only those offering lower-quality fare surviving.
In a bid to support affected employees, Leon has established pathways for staff to apply for roles at Pret A Manger and is exploring redundancy options where redeployment isn't feasible. Administrators are now considering a Company Voluntary Agreement (CVA) to restructure debts and keep the business operational, alongside negotiations with landlords to reduce rental costs.
Return to Roots and Brand Criticism
Following the repurchase, Vincent aims to steer Leon back to its foundational principles of providing natural, healthy fast food. He acknowledged that Asda viewed Leon as a misfit within its strategy, stating, 'In the last two years, Asda had bigger fish to fry.'
Co-founder Henry Dimbleby previously criticised Asda's management of the brand, accusing it of deviating from Leon's ethos by prioritising profitable but brand-damaging items like chips. Vincent has echoed concerns about peers facing similar losses due to unsustainable taxes and changing work patterns.
As Leon navigates this turbulent period, the focus remains on restructuring and revitalising the brand, with Vincent emphasising the need to 'take a good look under the bonnet' before making pivotal decisions. The Daily Mail has reached out to Leon and Quantuma Advisory for further comment on the situation.
