The UK’s biggest nightclub firm is planning 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 tough conditions have particularly affected some of its larger nightclubs.
The firm, which runs about 35 clubs and 12 late-night bars across the UK, said it had filed a notice of intention to appoint administrators for a number of companies within the group.
Peter Marks, chair of the firm, said the notice of intention gives the business “breathing space and protection” to work with lenders, landlords and other stakeholders on a potential restructuring plan.
Rekom UK said recent trade has been particularly affected by the higher cost of living faced by the young adults and students who use its venues.
It added that costs have risen sharply and the firm would need “to find an extra £2m in wages” after the government announced a rise in the minimum wage, which will take effects in April.
Marks said this “led to us having to accept that the group cannot continue in its current structure”.
He added: “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 restructure 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.”
The business had been run as Deltic Group before it went into administration in late 2020 after the impact of the pandemic and was bought by the Scandinavian nightclub operator Rekom.
Bosses said the Nordic arm of Rekom is not affected.
