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Mon 15th Jan 2024 - Exclusive: Rekom UK set for restructuring, group ‘cannot continue in its current structure’ |
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Exclusive – Rekom UK set for restructuring, group ‘cannot continue in its current structure’: Rekom UK, the UK’s largest nightclub operator, is set for a restructuring after filing a notice of intention to appoint administrators to a number of its companies, which could lead to the closure of a number of its sites, Propel has learned. Peter Marks, chairman of Rekom UK, which operates circa 35 clubs and 12 late-night bars throughout the UK, told Propel a combination of the cost-of-living crisis and the cost of doing business has led the business to “accept that the group cannot continue in its current structure”. Marks said: “Today Rekom UK has filed a ‘notice of intention’ to appoint administrators to a number of the companies in the UK group. This gives us 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. 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 on our £5m rates bill, it meant that we had to find an extra £2m 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. It is not all bad news. 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.” At the end of 2020, the then Deltic Group was bought out of administration by Scandinavian nightclub group Rekom for circa £10m. The intention to appoint administrators does not affect the Nordic arm of Rekom, which is backed by Danish private equity firm CataCap and operates circa 150 sites across Denmark, Finland and Norway. Talking last month, Marks said this business cycle “feels deeper and longer”. He was talking after Rekom’s latest Night Index – which surveyed a sample of 2,252 18-plus year olds, including 1,000 18 to 21-year-olds and 500 students, from 13 to 17 November 2023 – revealed people were spending, on average, £73.19 per person on a night out this year, 2.1% lower than in the autumn of last year. Marks said that Rekom UK had also honed in on big student events, clustered its venues in bigger cities and trimmed down on lower-earning dates and locations in smaller towns. He added that the group was gradually reducing its number of nightclubs and had decided to sell seven non-core businesses that were not making a profit this year. Instead Rekom UK has chosen to focus on its party-bar brands such as Heidi’s Bar and Proud Mary’s, which can welcome a wider range of consumers throughout their longer opening hours. Rekom UK has also made redundancies at its headquarters and slowed its refurbishment plan and new-builds to cut costs. Rekom UK features in the Who’s Who of UK Food and Beverage, the latest version of which will be released to premium subscribers on Friday (19 January). It is the first database where full profiles of 838 of the UK’s top food and beverage operators are available in one place. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.
UKHospitality warns new rail strike action will cost sector £350m: New strike action by rail union Aslef will cost the sector £350m, UKHospitality has warned. Aslef has announced another series of strikes between 30 January and 5 February, affecting different train operators each day. An overtime ban will also be in place from 29 January to 6 February. Kate Nicholls, chief executive of UKHospitality, said: “Once again, hospitality businesses are left dismayed by strike action that will be significantly detrimental to sales and see bookings cancelled. January and February are already two of the quieter months of the year for venues and this disruption will make it even more painful. We estimate this set of strikes will cost hospitality almost £350m, on top of the £4bn in lost sales the sector has already had to withstand. We continue to urge all parties involved to urgently reach an agreement and resolve this dispute. Ongoing strike action hurts businesses, prevents people from getting to work and significantly erodes confidence in the rail network.”
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