The loss-making company, bought back from Asda by its co-founder John Vincent in October, said it had begun a process that aimed to close unprofitable sites. It was to form part of a turnaround plan to restore the brand to its roots around natural foods.
It was unclear at this stage how many of its 71 restaurants – 44 of them directly owned – and approximately 1,100 staff would be affected by the plans for the so-called Company Voluntary Arrangement (CVA).
“The restructuring will involve the closure of several of LEON’s restaurants and a number of job losses”, a statement said.
“The company has created a programme to support anyone made redundant.”
It added: “LEON and Quantuma intend to spend the next few weeks discussing the plans with its landlords and laying out options for the future of the Company.
“LEON then plans to emerge from administration as a leaner business that can return to its founding values and principles more easily.
“In the meantime, all the group’s restaurants remain open, serving customers as usual. The LEON grocery business will not be affected in any way by the CVA.”
Mr Vincent said. “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 hospitality sector has taken aim at the government’s business rates adjustments alongside heightened employer national insurance contributions and minimum wage levels in place since April.
Mr Vincent sold the chain to Asda in 2021 for £100m but it struggled, like rivals, to make headway after the pandemic and cost of living crisis that followed.
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the latest version.
You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.
