Tue, 16 Jan 2024 | ADMINISTRATION
Rekom UK, the UK’s largest nightclub operator, has said it is planning to appoint administrators as it struggles with higher bills and reduced trading. The company, owned by Danish group Rekom, operates around 35 nightclubs in the UK.
The company owns the well-known nightclub brands Atik and Pryzm, as well as operating 12 late night bars. The business was formerly Deltic Group, which was acquired out of administration by Rekom in 2020 as the nightclub industry was decimated by the COVID-19 pandemic.
Rekom said that 2023 had again been a challenging year for the industry, with energy bills rising and the largely student-centered customer base of its larger nightclubs spending less amid the cost-of-living crisis, which it said has particularly impacted its midweek trading. Earlier this year, the company shut down its Pryzm venue in Watford, Hertfordshire, with owners saying there was “no choice” but to close the location.
The company is also facing the prospect of a further increase in costs, following a rise in the minimum wage announced in the government’s autumn budget. According to Rekom, this would lead to it needing to pay an additional £2 million in wages.
In a statement, Rekom said that a notice of intention to appoint administrators had been filed this week "for a number of companies within the group". The group’s operations in Denmark, Norway and Finland will not be affected.
In a statement, Rekom UK Chairman Peter Marks said that filing the notice would give the company “breathing space and protection” while it worked on a potential restructuring strategy with lenders, landlords and other stakeholder. Marks said that this process could result in a number of nightclubs shutting for good.
Marks continued that the pressures facing the company had "led to us having to accept that the group cannot continue in its current structure".
He continued: "We must go through this restructure to be able to come out stronger for the future," he said. For any venues that may not continue as part of Rekom UK, we will do our best to find new owners and save jobs."
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