UK's largest nightclub owner calls in administrators

The UK’s largest nightclub owner, Rekom, has called in administrators due to financial struggles stemming from increased energy prices and cost-of-living pressures for club attendees.

Pryzm-owner Rekom is struggling because of higher energy prices and cost-of-living pressures on nightclubbers.

Ekom, the owner of Atik and Pryzm brands, has acknowledged the possibility of permanently closing some of its well-known nightclubs as part of a potential business restructuring. The company cited the challenging conditions faced by the industry in the past year, attributing its difficulties to increased energy prices and students cutting back due to the rising cost of living. With approximately 35 clubs in the UK, Rekom admitted that poor midweek trading, typically driven by students, had adversely impacted its nightclubs, especially the larger ones.

On Monday, the company filed a notice of intention to appoint administrators for several entities within the group, providing the business with “breathing space and protection” to collaborate with lenders, landlords, and other stakeholders on a potential restructuring plan, according to Peter Marks, the chairman of the firm.

In addition to facing challenges from increased cost-of-living pressures on its customers, the company noted rising costs and anticipated further difficulties after a recent minimum wage hike announced in the government’s autumn statement. Consequently, Rekom stated the need to allocate an additional £2 million for wages. Mr. Marks acknowledged that these circumstances necessitated a restructuring, emphasizing the imperative to emerge stronger for the future.

Acknowledging the possibility of venues not continuing under Rekom UK, Mr. Marks reassured that efforts would be made to seek new owners and preserve jobs. The specific venues affected by the restructuring remain uncertain. Notably, Pryzm in Watford closed in January, citing unavoidable circumstances. Despite the challenging conditions, Rekom highlighted the exceptional performance of its Nordic bars, including Heidi’s Bier Bar in Birmingham and Cardiff, and Proud Mary in Cardiff and Swansea, which surpassed expectations.

Previously operating as Deltic Group, the business went into administration in late 2020 due to the profound impact of the Covid-19 pandemic and was subsequently acquired by Scandinavian nightclub operator Rekom. Rekom also owns various bars and clubs in Denmark, Norway, and Finland, which are stated to be unaffected by the restructuring.