Recipe for disaster: TV chef George Calombaris’s empire crashes

Hundreds of job losses will flow from George Calombaris’s food empire collapse.

Hundreds of job losses will flow from the collapse of George ­Calombaris’s food empire, which was cooked when the fallout from the wages scandal sparked a customer backlash.

Voluntary administrators were appointed to 22 MAdE Establishment Group companies after Australia’s most controversial TV chef failed to find a white knight to save the business. Hundreds of staff were paid their outstanding wages and superannuation but most will leave the businesses, which included the iconic but rebadged The Press Club in Melbourne’s CBD.

Calombaris put his mansion in Toorak, in Melbourne’s inner southeast, on the market on Monday, hoping to receive up to $7m, soon after selling a $1m beach house on the Mornington Peninsula. He expressed deep sadness as KordaMentha was made volun­tary administrator and only one of his brands, Yo-Chi, looked likely to survive in Melbourne.

“On a personal note, the last few months have been the most challenging I have ever faced. I am gutted that it’s come to this,’’ Calombaris wrote on Instagram.

The Commonwealth Bank is believed to be a major creditor, with traders and suppliers having placed heavy pressure on the company in recent weeks. The extent­ of the debts are not fully known and will become clear after the administrators investig­ate the company books. Cashflow is believed to have been starved after the 2017 scandal in which the group failed to pay nearly $8m in wages and benefits owed to staff.

This led to a huge backlash against the chef who, at his peak, was one of the country’s most popular entertainers, via the MasterChef brand.

Appointment of the administrators excludes Yo-Chi, a yoghurt­-based health food brand with two standalone stores in Melbourne’s inner east and several others linked to Greek street food brand Jimmy Grants.

Victorian Trades Hall Council secretary Luke Hilakari blasted Calombaris over the job losses, castigating him over the need to refund the lost entitlements. “This is a double assault on working people­ — first, Calombaris rips off workers and owes them $7.8m in wages, and now they face losing their jobs. No worker should lose a job, or a dollar, when Calombaris is still cashed up. Calombaris’s wage theft has left a bad taste in the public’s mouth and they have chosen to eat elsewhere.’’

Attention is set to focus on the scale of Calombaris’s personal wealth, although it is unlikely to be threatened unless the adminis­trators were to detect wrongdoing. There is no evidence of this.

The chef’s Toorak mansion is up for private sale. Picture: David Geraghty

Administrator Craig Shepard said a major rebranding of the business, which had included the rebranding of Hellenic Hotel Williamstow­n (relaunched as Hotel Argentina), Hellenic Repub­lic Brunswick (recently reopened as Crofter Dining Room) and The Press Club (relaunched as Elektra), was unable to turn the business around.

“Other factors were generally difficult trading conditions in the hospitality industry in recent years due to the expansion of the on-demand­ economy via services such as UberEats and Deliveroo, increasing costs, fierce industry competition and changes in ­consumer tastes to favour cheaper mid-tier dining options,’’ he said.

KordaMentha said in a statement that the 2017 underpayment scandal had harmed the business.

Mr Shepard said the administrators would seek alternative operato­rs for the venues and ­engage with other stakeholders to realise the group’s assets.

A first meeting of creditors would be held on February 20.

George Calombaris.

No one was home at Calombaris’s five-bedroom, five-bathroom Toorak home on Monday, where a sign declared agency Kay & Burton was taking expressions of interest. A spokeswoman for Kay & Burton said the campaign to sell Calombaris’s mansion would begin in “about mid-March”.

The property, which features a pool and in-home theatre/gym, was bought for $4.75m in 2013 in the name of Calombaris’s wife, Natalie Tricarico. Industry experts believe it is now worth up to $7m, although the family’s bargaining position will be undermined by Calombaris’s plight.

On Australia Day, the couple sold a Safety Beach holiday house on the Mornington Peninsula for $1.01m at auction.

They had bought the property for $580,000 in 2013 through their company, Trical Beach Pty Ltd. Trical Beach also owns a holiday house in nearby Arthurs Seat, purchased for $2.2m in February 2018.

In 2017, the Fair Work Ombudsman ordered MAdE Establishment to make a $200,000 payment for underpaying $7.8m in wages to 515 past and present staff.

The scandal unleashed a social media firestorm and devastated Calombaris’s brand; he left Master­Chef last year and insiders believe the restaurants and other food outlets never recovered from the fallout of the scandal.

Swisse vitamins rich-lister Radek Sali invested in the chain of restaurants in 2016, in the period preceding the Fair Work Ombudsma­n’s operation. He did not respond to The Australian on Monday.

KordaMentha said: “The appointme­nt excludes the Yo-Chi operations, which will continue to trade as usual. All other venues have stopped trading immed­iately. Employees have been paid all outstanding wages and superannuation up to the date of the ­appointment.’’

Additional reporting: EWIN HANNAN