The UK’s biggest nightclub firm is to call in administrators as part of a restructuring that could result in venues closing for good.
Rekom UK, which owns brands including Atik and Pryzm, said it had been an “extremely difficult” year for the late-night sector, with pressure from the cost-of-living crisis and rises in the price of energy and goods.
The company said difficult conditions have particularly affected some of its larger nightclubs, and cited young adults avoiding alcohol on a night out as a main reason as to why the sector is facing a difficult period, as revealed in its own Night Index report, which surveyed a sample of 2,252 adults aged 18 and over last November, revealing that 45.9% who do go out on a regular basis are avoiding alcohol.
Rekom UK, which runs 46 sites including the Pryzm and Atik brands, said the restructuring could see some of its venues close for good.
Peter Marks, chairman of Rekom UK, said: “This gives us breathing space and protection to be able to work with our lenders, our landlords and other stakeholders to come up with the best solution for the UK group going forward.”
Rekom UK has filed a notion of intention to appoint administrators to several companies in the UK business.
Mr Marks added: “It is not all bad news. We still have a core of successful club and bar businesses and our Nordic brands, Heidi’s Bier Bar in Birmingham and Cardiff and Proud Mary in Cardiff and Swansea have outperformed all expectations.
“But we must go through this restructuring to be able to come out stronger for the future. For any venues that may not continue as part of Rekom UK, we will do our best to find new owners and save jobs.”
Sarah Taylor, licensing partner at Keystone Law said: “It is an incredibly challenging time for the hospitality industry and statistics continue to show the pressure nightclubs, restaurants and pubs are under. Not only is the cost of living crisis impacting businesses, they also have to grapple with higher energy prices and the fact younger people are not drinking in the same quantities, if at all, as previous generations. Rekom appointing administrators highlights how the night-time economy has changed and the difficulties that come with that.”
“Many operators and insolvency practitioners are unaware that an insolvency event causes a premises licence to lapse, and that swift action must be taken to ensure that premises licences are preserved. Under the Licensing Act 2003, an insolvency event causes an immediate lapse of the premises licence.”
“If a licence is not transferred in time, or if an interim authority is in place but the requisite subsequent transfer does not take place within three months, the licence will be permanently lost, and it will be necessary to make an application for a new premises licence. It may not always be possible to secure the grant of the licence upon the same terms as the previous licence. Often, if the locality has changed and, for example, residential accommodation has been built alongside hospitality premises, it is common for representations to be received from local residents with concerns regarding the potential for public nuisance or crime and disorder.”
