THE UK’s biggest nightclub operator, which has 50 venues, is at risk as it plans to call in administrators.
It comes as part of a major restructuring which could see several sites shut their doors for good.
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Rekom UK, which owns brands including Atik and Pryzm, said it comes after an “extremely difficult” year for the late-night sector amid pressure from the cost of living crisis and surges in inflation.
The firm said that in particular its larger venues had been affected.
Rekom owns and runs around 35 clubs and 12 late-night bars across the UK.
On Monday, it announced it had filed a notice of intention to appoint administrators for a number of companies within the group.
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Peter Marks, chairman of the company, said the “notice of intention” gives the business “breathing space and protection”.
It means it can work with lenders, landlords and other stakeholders on a possible restructuring plan.
Rekom said recent trade has been particularly impacted by the heavy toll of the higher cost of living on young adults and students who regularly use its venues.
In August a survey revealed that a third of those polled are not hitting the town as much as last year to save money.
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Figures showed a third of clubs have closed since 2020, although spending is still strong among older partygoers.
Energy costs have risen over the past year and more punters are cutting back on nights out.
This has left some venues grappling with inflationary costs and with no choice but to close sites to cut costs.
Big brand chains have been closing locations across the country.
In December, Pryzym closed the doors on one of its nine venues, leaving revellers devastated.
The chain closed its branch in Plymouth, which had a 2,300 capacity.
Elsewhere, Britain’s oldest casino closed for the last time after 195 years in business.
And a popular Glasgow nightclub announced its shock closure in August.
Smaller venues have also been affected.
At the end of last year, the Moles music venue in Bath announced that it had closed after decades of hosting bands including Oasis and Radiohead.
Rekom added that it has seen a surge in costs and would face further pressure from needing “to find an extra £2million in wages” after the government announced a rise in the minimum wage during the latest autumn statement.
Mr Marks said: “[This] led to us having to accept that the group cannot continue in its current structure.
“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.”
He added that the firm “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,” he said.
Rekom had been run as Deltic Group before it collapsed into administration in late 2020.
It came following the heavy impact of the Covid-19 pandemic and was bought by Scandinavian nightclub operator Rekom.
Earlier in 2023, Mr Marks, had warned the industry was being hit particularly hard by the cost of living crisis.
He said he was “desperately concerned” about how this is particularly affecting students, who are out socialising less regularly than previous groups.
Bosses confirmed that the Nordic arm of Rekom is not affected by the restructuring plans.
What does going into administration mean?
When a company enters administration, all control is passed to an appointed administrator – who has to be a licensed insolvency practitioner.
Their goal is to leverage the company’s assets and business to repay creditors.
Once the administrator has taken over, a moratorium is placed around the company and stops all legal actions.
After the administrator takes over, there isn’t much that can be done to reverse the process.
The administrator will write to your creditors and Companies House to say they’ve been appointed.
They will try to stop the company being liquidated but if they can’t, the administrator will pay as much of a company’s debts as possible from the assets.
The administrator has eight weeks to write a statement explaining what they plan to do.
This must be sent to creditors, employees and Companies House and invite them to approve or amend the plans at a meeting.
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