Leon to Implement Store Closures and Workforce Reductions Amid Restructuring

Leon has revealed plans to shutter a number of its locations and reduce its workforce as part of a significant reorganization of the well-known High Street restaurant chain. The company has enlisted the services of Quantuma to act as administrators following the reacquisition of the business last month by its co-founder, John Vincent, from Asda.

This decision jeopardizes the future of some of the chain’s 71 outlets, particularly those that are performing poorly. However, no specific closures have been confirmed yet, and all current locations remain operational.

Employing approximately 1,000 individuals, Leon has not disclosed the exact number of employees who will be impacted but has indicated an intention to prioritize job placements within the remaining open restaurants.

“After conducting an initial assessment of the company, our immediate focus is to close the most unprofitable locations,” stated Mr. Vincent.

He elaborated that in many instances, alternative brands have taken over their spaces. In other cases, the company will request landlords to reclaim leases and seek more fitting operators.

In addition, Leon has established a partnership with Pret A Manger to assist employees unable to transition to other Leon locations. This initiative enables affected workers to explore job opportunities within the coffee chain.

Moving forward, Leon plans to collaborate with Quantuma over the next few weeks to engage with landlords and explore potential scenarios for the company’s future.

Mr. Vincent expressed his belief that the company had strayed from its foundational values during the leadership of EG and Asda. Nevertheless, he acknowledged the difficulties faced by these entities in managing a fast-food chain focused on healthier options.

“In recent years, Asda had larger concerns to address, and Leon was often viewed as misaligned with their strategic goals,” he remarked.

He pointed out that the entire sector is grappling with challenges, as evidenced by the substantial losses reported by many companies due to evolving work patterns and rising tax burdens.

Asda had previously indicated that selling Leon back to Mr. Vincent would enable the company to concentrate on its core retail activities, which include everything from grocery stores to fuel stations.

Leon has attributed its current difficulties to internal obstacles, shifting work patterns stemming from the Covid pandemic, and tax increases, all of which have adversely impacted the broader hospitality industry.

Mr. Vincent called on the government to reassess the tax pressure imposed on the hospitality sector. He stated, “Currently, for every pound received from customers, approximately 36 pence is allocated to taxes, leaving about 2 pence for the company. This is why many operators are reporting significant losses.”

Recognized for its unique approach to fast food, Leon aims to demonstrate that it is feasible to provide meals that are both delicious and beneficial to health.

Since opening its inaugural location in London in 2004, the chain has distinguished itself from other fast-food competitors known for their fried chicken, burgers, and fries.

Leon’s announcement comes on the heels of Pizza Hut’s UK operator, DC London Pie, revealing plans to close 68 restaurants and 11 delivery sites, resulting in over 1,200 job losses.

According to administrators, DC London Pie has been adversely affected by a combination of challenging trading environments and increased operational costs, including tax obligations.