Saturday, October 29, 2011

UK nightclub chain goes bust

The financial crisis looks to have killed off the UK's largest chain of nightclubs, threatening up to 3000 jobs. According to the Finacial Times (27 October 2011):

'Clubbers put away your dancing shoes: Luminar , the only London-listed nightclub company, is to go into administration after failing to secure an extension to its banking covenants.In a statement, the owner of clubs such as Love Social and Fuzzy Logic said it would immediately suspend business and place the company in administration because it was unable to meet repayment obligations on its debt, which fall due on October 27.

Luminar has approximately £85m in net debt owed to Lloyds TSB, Barclays and Royal Bank of Scotland. The company is the largest UK nightclub owner by number of venues, with 75 clubs across the UK employing 3,000 full and part-time staff. However the company had experienced several years of declines in like-for-like revenues.

The company was hit hard by the smoking ban and government licensing re-arrangements which meant pubs could extend their drinking hours beyond 11pm. Following the changes, Luminar cut the number of clubs it owned from 230 at the end of 2006 to 100 clubs two years later. More recently Luminar’s core 18-24-year-old customer base has been badly hit by the economic downturn and subsequent youth unemployment' (read full article here).

Venues owned by Luminar include the numerous Lava & Ignite, Life, Oceana, Bar Rock, Jumpin Jaks and Liquid clubs found in town centres across the country (full list here). It started out in 1988 with one club, Manhattan Nitespot in King's Lynn, and grew rapidly, being floated on the stock exchange in 1996.

No comments: