Leon files for administration and plans site closures

Leon is to close sites and cut jobs after filing for administration as part of a restructuring led by co-founder John Vincent, who bought back the fast-food chain from Asda last month.

The company has applied for an administration order to support proposals for a company voluntary arrangement (CVA) aimed at accelerating its turnaround. The move follows a deal reported to be worth between £30m and £50m – far below the £100m paid by former owners Mohsin and Zuber Issa in 2021.

The business said the priority for Vincent and his team is to reduce loss-making restaurants. It cited shifts in working patterns since the Covid-19 pandemic and recent tax rises as key pressures on trading.

In its statement, Leon said that although Vincent believes the company “drifted from its values” under previous ownership, he recognised the challenges faced by EG and Asda. It added that all restaurants remain open while the process is under way and that its grocery range will not be affected by the planned CVA.

Leon expects to spend the coming weeks discussing plans with landlords alongside advisers Quantuma. A spokesperson said the chain aims to emerge “as a leaner business” better able to focus on its founding principles.

Vincent said companies across the sector were facing heavy losses due to working patterns and what he described as “unsustainable” taxes. 

He said: “Today for every pound we receive from the customer, around 36p goes to the government in tax, and about 2p ends up in the hands of the company.”

“In many cases we have found other brands to replace us, and in others we will be asking the landlords to take the leases back.” 

Quantuma aims to work with Leon to deliver the best outcome for creditors, suppliers and employees, noting strong early support from landlords and the supply chain.

Leon was founded in 2004 by Vincent, Henry Dimbleby and Allegra McEvedy. It currently operates 71 restaurants, including 44 owned sites and 22 franchised locations.

The chain had already reduced its workforce before the sale by Asda. In September, it confirmed a 17% cut in headcount – 224 roles – as it dealt with cost inflation and weaker spending. Sales fell 3.9% to £62.5m in 2024, while losses narrowed to £8.4m from £12.5m the previous year.