Richard Caring apologises for supplier letter amid wave of criticism
Richard Caring has been forced into an embarrassing apology after City PM revealed his restaurant group demanded suppliers take a “mandatory” 2.5 per cent pay cut.
The founder of the Ivy Collection and Caprice Holdings endured a wave of criticism after our exclusive story last week, with the saga branded a PR disaster.
Billionaire Caring has now reversed the decision, which apparently came from his head of indirect and beverage procurement Jeremy Evans, claiming he had no knowledge of the letter and called it “totally incorrect”.
Andy Scott, chairman of turnaround and litigation at REL Capital wrote on LinkedIn: “When you are marketing to sell your businesses for over £1bn, your last accounts show revenue increasing, profits of £37m, up from £29m the previous year, you are owned by a billionaire and Saudi Royalty, the optics on this look really bad. Don’t you have expensive PR advisors?
Supplier letter is ‘A PR disaster’
“Even if we park the unlawful legal arguments here, you just look like a bully who can’t be trusted and a complete a******e! Hopefully suppliers have the balls to all club together, write back serving notice of a Repudiatory Breach, put them on stop and ask for cash on delivery until resolved, given they purport to be struggling.
“Supplier margins are already wafer thin, with many struggling themselves. One thing I loved about the hospitality sector was the camaraderie and ‘look after each’ other mindset. Despite orders from above, I suspect Jeremy Evans won’t be getting many Twickenham invites from suppliers this autumn!”
The original letter said Caring’s empire was cutting costs because of the “increased tax burden and cost of employment, cost of indirect products [and] services and also direct cost of food and beverage.”
It continues: “Our businesses work hard to mitigate cost wherever possible in order to maintain value for money and relevance to their guests. If our businesses are strong and growing then we hope your business will also benefit. To ensure our businesses can remain strong we will apply a 2.5 per cent discount on supplier accounts at point of payment.
“This mandatory discount is being applied in response to the current increased cost of trading. We are asking all of our supplier partners to work with us as we support each other through this difficult period. The discount will be applied from the next available pay run and will remain in place until further notice.”
But over the weekend Richard Caring claimed ignorance, telling the Times: “This letter should not have been written in the manner that it was. I had not seen it and certainly had not approved it. I want to apologise to our suppliers for the letter, which is totally incorrect.
“I want to make it clear that at no time would we put this into operation without the full agreement of each supplier and at no time should we have suggested a mandatory positioning.”
The episode comes amid rumours Richard Caring is in advanced talks to sell a £1b stake in Troia, the company behind the Ivy Collection, with Abu Dhabi royal Sheikh Tahnoon bin Zayed al-Nahyan understood to be interested, according to the Financial Times.
Richard Caring: letter is ‘totally incorrect’
That sale could include a stake in London icons Annabel’s, the George Club and Harry’s Bar as well as the Ivy Collection, which operates more than 40 restaurants in the UK and Ireland.
Its financial accounts for 2023, published in April seven months after the Companies House deadline, showed Caprice Holdings shed 300 jobs. Its pre-tax profit rose from £29m to £37.6m and revenue increased from £302.9m to £314.7m over the same period.
Caring owns up to a 50 per cent stake in the business, with other shareholders including the former Qatari prime minister Sheikh Hamad bin Jassim bin-Jaber al-Thani.
Ron Hully, a partner at business advisory firm Logros wrote on LinkedIn that the story is “Turning into quite a PR shocker… It will also be interesting to see if it has any impact on the group’s corporate sale. An expensive letter if it caused the rumoured £1bn deal to fall over!”
Sue King, a retired senior officer at HM Revenue & Customs joked that she liked the idea of “arbitrarily applying a discount if I eat there again!”