Fast food chain Leon is set to close a number of restaurants and cut jobs after taking over, just weeks after it was bought back by its co-founder John Vincent in a deal worth between £30m and £50m.
The company has applied for an administrative order to enable the formulation of a Company Voluntary Arrangement (CVA), which it says will accelerate a wider restructuring of the group. Leon’s immediate priority will be to reduce the number of loss-making locations as the company looks to stabilize the business and return it to profitability.
Vincent reacquired Leon last month from Asda, which bought the chain in 2021 as part of the Issa brothers’ EG Group empire. This acquisition valued Leon at around £100 million, significantly higher than the price paid in the recent buyback.
In a statement, Leon said that since the pandemic, the company has been severely affected by changing working patterns as well as rising taxes and cost inflation, pressures that have affected much of the hospitality industry. The company added that while Vincent believes Leon has deviated from its original values under the previous ownership, he is aware of the challenges Asda and EG face as operators.
John Vincent said Leon no longer fit Asda’s strategic priorities and that the problems facing the chain were widespread across the industry. He pointed out that low footfall, hybrid working and what he called an increasingly unsustainable tax burden were the main causes of losses in the casual dining sector.
Leon will now spend the coming weeks holding discussions with landlords, supported by regeneration consultants Quantuma, to agree proposals for the future of the property. The aim, the company says, is to emerge from administration as a smaller, leaner company that can more easily return to its founding principles.
All Leon restaurants will continue to trade as usual throughout the process and the group’s food division will not be affected by the CVA. The company has not confirmed how many locations will be closed or how many jobs will be lost.
According to Leon, where there are closures, they will first try to transfer the staff to other restaurants. Employees who cannot be relocated within a reasonable working distance will receive severance pay. Additionally, the chain has reached an agreement with Pret A Manger that will allow affected employees to apply for positions through a dedicated recruitment channel.
Vincent also used the announcement to call for a review of what he said was an excessive tax burden on the hospitality industry. He said for every pound spent by customers, around 36p goes to the government, leaving businesses with little scope to absorb rising costs.
Leon currently operates 71 restaurants, including 44 owned locations and 22 franchise locations. Before Asda’s sale, the chain had already cut hundreds of jobs and reduced headcount by 17 percent in 2024 to stem losses. The latest accounts showed sales fell to £62.5m with losses of £8.4m, an improvement on the loss of £12.5m the previous year.
Founded in 2004 by Vincent, Henry Dimbleby and Allegra McEvedy, Leon now hopes a period of restructuring will allow it to rebuild and return to growth.
