Gordon Ramsay's Real Kitchen Nightmare — How TV Chef Is 'Clutching at Culinary Straws' After His Restaurant Empire Loses an Astonishing $20.4 Million in a Year

Gordon Ramsay is facing what insiders describe as his real kitchen nightmare, with new figures revealing his restaurant empire plunged into an extraordinary $20.4 million loss in a single year – a crisis sources tell OK! has left the TV chef "clutching at culinary straws."

The reversal of fortunes comes as TV chef Ramsay unveils plans for a lavish new venture, Bonheur by Matt Abé, to be built on the former site of London's fabled Le Gavroche – the restaurant where he trained in his 20s and which became the first in the U.K. to win three Michelin stars.

His new Mayfair spot will offer two tasting menus priced at roughly $245 for five courses and $283 for seven, along with an à la carte option at about $207 for three courses. News of the launch follows a week in which Ramsay, while celebrating Sir David Beckham's knighthood, hosted the footballer and his wife Victoria at his Michelin-starred restaurant, serving scallops with caviar and champagne until 1 a.m.

But days earlier, there was nothing to drink to as Union Street Café Limited, the company overseeing Ramsay's U.K. restaurants, confirmed its pre-tax losses had soared to around $20.4 million in the 70 weeks to December 29 despite rising sales. The company has slashed nearly 200 jobs and shuttered sites across its Street Burger and Street Pizza chains, along with Bread Street Kitchen cafés.

Even Ramsay's Harrods burger bar – known for an $106 wagyu burger – is closing. Andy Wenlock, chief executive at Gordon Ramsay Restaurants, said: "We saw strong sales and underlying earnings last year despite continuing pressure on costs and people."

Industrywide, the strain is also showing. Giorgio Locatelli recently closed Locanda Locatelli, while Rick Stein has shut outlets in Wiltshire and Cornwall. Neat Burger, backed by Lewis Hamilton and Leonardo DiCaprio has closed its final U.K. branches.

Jeremy King, who is among Britain's most influential restaurateurs, said: "Everything all at once. It's a long time since the industry has been under as much pressure." Rising transport and labor costs, surging energy prices, Brexit-driven workforce shortages and a sharp increase in wage and insurance contributions have pushed labor costs from 25 percent of operating expenses to as high as 40 percent. The UK Hospitality group estimates the sector is facing an additional $4 billion in running costs. Diners, meanwhile, are eating out less. And many who still go are spending less, drinking less and leaving earlier.

Weight-loss drugs are also reshaping menus. An estimated two million Britons use appetite-suppressing medication. Ramsay has admitted: "We were never faced with that kind of complication 20 to 30 years ago."

Some chefs are responding with cheaper menus. Stuart Gillies, Ramsay's former global chief executive, said about offers at his new restaurants: "We have cocktails from $9 and $25 for two courses at lunch Monday to Friday."

Yotam Ottolenghi has praised new affordable chains, while Heston Blumenthal has launched a reduced-portion menu at the Fat Duck.

Ramsay has dismissed such compromises as "bulls---," adding: "There's no way that we're coming in with an Ozempic tasting menu to make you feel like less of a fat f--- by 10:30 in the evening."

One senior industry source said: "Gordon's pushing luxury just as diners are sick of giant bills. Add the boom in weight-loss drugs and appetites literally shrinking, and his latest high-end bid may be doomed before it even opens."

Another insider added: "People want value. Gordon wants opulence and that is what his brands are all about, with price tags to match. That gap is growing every month."

Critics have long argued Ramsay expanded too aggressively. In 2009, his empire nearly collapsed, with auditors warning Gordon Ramsay Holdings had breached loan covenants on a $630,000 overdraft and $12.6 million in loans, alongside $8.8 million owed in tax.

Ramsay later conceded: "Tenacity and ambition overtook me. We flew too high, too fast."

Despite recent losses – and a brush with skin cancer and a near-fatal cycling accident in the U.S. – Ramsay continues expanding in Spain, Saudi Arabia, India, London and America, where he has become a TV household name thanks to his long-running Kitchen Nightmares U.S.A. show.