The UK’s largest nightclub operator has announced that it plans to call in administrators due to higher bills amid the ongoing cost of living crisis.
Rekom UK, which owns the Pryzm and Atik brands, said any restructuring of the firm could result in the permanent closure of some of its popular nightclubs (via BBC News).
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The company cited challenges within the nighttime industry over the past year, blaming increased energy prices and students cutting back because of the current cost of living for its issues.
Rekom UK runs approximately 35 clubs across the United Kingdom, including the Pryzm chain. Its branch in Kingston upon Thames – which has a capacity of 2000 guests – often hosts intimate shows by big-name acts in partnership with Banquet Records.
Recent performers include The Vaccines, The Kills, Rick Astley, The Pretenders, The Streets, Shania Twain, Royal Blood, Boygenius and Tears For Fears.
Last year, Rekom UK said its venues were struggling because of poor midweek trading that was usually driven by students – explaining that “larger nightclubs” had been particularly affected.
A notice of intention to appoint administrators “for a number of companies within the group” was filed yesterday (January 15).
Peter Marks, chairman of Rekom UK, said the notice would give the company “breathing space and protection” to work with lenders, landlords and other stakeholders on a potential restructuring plan.
The statement added that costs had increased, and predicted further difficulties in the future after a rise in the minimum wage during the government’s latest autumn statement.
Rekom UK said it would need “to find an extra £2million in wages” as a result.
Marks explained that this “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.
“For any venues that may not continue as part of Rekom UK, we will do our best to find new owners and save jobs.”
Currently, it is not known which venues could be impacted. Pryzm in Watford shut down this month, with its owners saying they had “no choice but to close the venue”.
They explained that they had been “unable to reach an agreement with the landlord on a new lease”.
Despite the recent challenges, Rekom UK said its Nordic bars Heidi’s Bier Bar in Birmingham and Cardiff, and Proud Mary in Cardiff and Swansea had “outperformed all expectations”.
Previously, Rekom UK had been operated as Deltic Group before the firm went into administration in late 2020 following the impact of the COVID-19 pandemic.
Rekom UK is part of the Scandinavian company Rekom Group, which describes itself as “the largest nightlife group in northern Europe”. It also owns bars and nightclubs in Denmark, Norway and Finland – though these won’t be affected.
Last month, figures from the UK grassroots live music scene spoke to NME about how 2023 was the “worst year for venue closures”.
A report in August, meanwhile, revealed that over 100 independent nightclubs across the UK had been forced to close down over the previous 12-month period. The decline of such establishments was predicted to be largely due to the ongoing cost of living crisis.
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