17 January 2024 , 15:44
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Rekom UK, the country's largest nightclub company, is set to hire administrators as part of a major restructuring.
This could result in several venues closing permanently. The firm, which owns brands like Atik and Pryzm, has had an "extremely difficult" year due to the cost-of-living crisis and rising energy and goods costs.
The company, which operates about 35 clubs and 12 late-night bars nationwide, filed a notice of intention to appoint administrators for several group companies earlier on Monday. Peter Marks, the firm's chairman, said this move provides the business "breathing space and protection" to work with lenders, landlords and other stakeholders on a potential restructuring plan.
Rekom stated that recent trading has been heavily impacted by the high cost of living affecting young adults and students, who are regular patrons of its venues. It also mentioned that it has experienced a surge in costs and will face more pressure from needing "to find an extra £2 million 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". The boss 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."
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"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."
Rekom enjoyed success before stumbling into administration due to the blows inflicted by the Covid-19 pandemic. The Scandinavian nightclub company scooped it up. The company clarified that their Nordic branch is not affected by this.
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