In a response to the severe challenges faced by the late-night entertainment sector over the past year, Rekom UK, the largest nightclub firm in the UK, is contemplating the appointment of administrators. This significant move is part of an extensive restructuring strategy that could result in the permanent closure of several venues under its portfolio.
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Rekom UK, renowned for brands like Atik and Pryzm, disclosed that the late-night industry had endured an “extremely difficult” year, primarily due to the cost-of-living crisis and escalating energy and goods expenses. The adverse conditions have disproportionately impacted some of the larger nightclubs within the group.
The company, overseeing around 35 clubs and 12 late-night bars across the country, officially filed a notice of intention to appoint administrators for multiple entities within the organization on Monday. Peter Marks, the Chairman of Rekom UK, explained that this “notice of intention” grants the business “breathing space and protection” to collaborate with lenders, landlords, and other stakeholders to formulate a potential restructuring plan.
Recent trade, as noted by Rekom, has been significantly affected by the financial strain on young adults and students who are frequent patrons of its venues. The company highlighted surges in operational costs and emphasized the additional pressure of needing “to find an extra £2 million in wages” following the government’s announcement of a minimum wage increase during the latest autumn statement.
Mr. Marks acknowledged that these circumstances necessitated the acknowledgment that the group cannot sustain its current structure. Despite the challenges, he highlighted the success of certain club and bar businesses, specifically mentioning Nordic brands like Heidi’s Bier Bar in Birmingham and Cardiff, as well as Proud Mary in Cardiff and Swansea, which have surpassed expectations.
While admitting the need for a restructure, Mr. Marks affirmed the commitment to emerging stronger for the future. In addressing potential venue closures, he stated, “For any venues that may not continue as part of Rekom UK, we will do our best to find new owners and save jobs.” The company aims to navigate these difficulties while safeguarding its core successful establishments.