Rekom calls in administrators amid nightlife woes

The UK’s largest nightlife operator, Rekom, has called in administrators for some of its venues as the sector continues to struggle.

Rekom owns around 52 sites in the UK – including the Pryzm and Oceana nightclubs – and chairman of its UK division, Peter Marks, said the move to appoint administrators gives the company “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 forwards”.

Rekom UK did not confirm which companies in its portfolio it had appointed administrators for.

Rekom has cited young adults avoiding booze on a night out as a main reason as to why the sector is facing a difficult period. There were warning signs in its Night Index report, which surveyed a sample of 2,252 adults aged 18 and over last November, and showed that 45.9% who do go out on a regular basis are avoiding alcohol.

The cost-of-living crisis is also said by the company to be a big factor preventing people from going out.

Marks said: “The last 12 months have been extremely difficult for the late-night sector, particularly affecting some of the larger nightclubs. This has been the result of the combination of the cost-of-living crisis that has so badly affected the young adult/student market, together with the cost-of-doing-business crisis.

“For example, while the government’s Autumn 2023 Statement saved us £120,000 [US$151,720] on our £5m [US$6.3m] rates bill, it meant that we had to find an extra £2m [US$2.5m] in wages.

“Not only that, the cost of goods and energy have also seen inflation-busting rises. This has led to us having to accept that the group cannot continue in its current structure.”

In August, the company commissioned another survey on consumer behaviours towards nightlife that revealed more than a third of UK consumers have reduced how frequently they go on a night out.

It’s not all bad news though, Marks sees some positives in the situation, particularly with Rekom’s Nordic brands.

He affirmed: “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.

“This does not affect the Nordic arm of Rekom.”

In 2020, Rekom brought Deltic out of administration – previously the UK’s largest nightclub group. The merger was said to have saved thousands of jobs.

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Author: Rupert Hohwieler