Gordon Ramsay's restaurant group faces kitchen nightmare after suffering $7 million pre-tax loss

Celebrity chef Gordon Ramsay's restaurant business has fallen to a pre-tax loss after the temporary closure of one site and legal costs in the US. Photo / Getty Images

Celebrity chef Gordon Ramsay's restaurant empire has posted a £3.8 million ($7.4m) pre-tax loss on the back of a restaurant closure and an ongoing legal row in the US.

Accounts for Kavalake, the chef's holding company for his 14 London-based restaurants, show sales were down marginally to £51.4m as his three Michelin starred Restaurant Gordon Ramsay and the Savoy Grill failed to make up for the five-month closure of his Plane Food site in Heathrow's Terminal 5.

The temporary closure pushed the company from a £102,000 profit in the year to 31 August 2016 to a £3.8m loss last year, according to The Daily Telegraph.

A major dent to profits came from a spike in legal costs linked to an ongoing battle with a former business partner in the US.

Kavalake said GR US Licensing LP was party to a litigation claim in the US from a former joint venture partner relating to the closure of the LA-based Fat Cow restaurant.

"This litigation also involves counter claims against the joint venture partner, and in the opinion of the directors it is very unlikely that any claim against the group will be successful," it added.

Elsewhere, the company said a 10-year lease had been signed for Maze and Maze Grill Mayfair but that the former would close in January next year and be replaced by a new concept.

Kavalake also accounts for the 18 overseas restaurants that Gordon Ramsay has license agreements with.

International revenue grew by more than half to £5.4m and five more international sites are due to open in 2018, including a Hell's Kitchen concept - named after the celebrity chef's television show - which will have one site in China and four in the US.

The company said since the end of the accounting period, it had secured a five-year funding agreement with Barclays.

The company owed nearly £33m to creditors in the year following the end of the accounting period, including taxes and £12.4m of intercompany loans.