Mon, 05 Feb 2024 | BUSINESS SALE
Seven companies within the Rekom Group, a UK operator of bars and nightclubs, have fallen into administration. 11 sites have been saved in a pre-pack acquisition by another entity within the group, joining 12 that were unaffected by the administration, but a further 17 venues have closed.
Rekom UK, the UK’s largest nightclub operator, announced last month that it was set to appoint administrators amid struggles with reduced trading and higher bills. Prior to the administration, the UK business, a subsidiary of Danish group Rekom, operated 35 nightclubs across the UK, as well as 12 bars.
The company was formerly Deltic Group, which fell into administration during the COVID-19 pandemic before being acquired by Rekom, and operates the Pryzm and Atik nightclub brands. Despite its scale, the company faced an incredibly challenging year in 2023, with energy bills soaring and its largely student-centered customer base spending less as a result of the cost-of-living crisis. It was also facing a £2 million increase to its wage bill after the government announced a minimum wage increase.
After filing a notice of intention (NOI) to appoint administrators in January, Jon Roden, Rob Parker and Helen Dale of Grant Thornton were appointed as joint administrators of seven companies within the group. After a review of the business, the administrators confirmed 17 venues would close with immediate effect, while 11 were sold to another Rekom company in a pre-pack deal.
Rekom UK Chairman Peter Marks said: "We have made every effort to redeploy staff across the business where possible and we're pleased to have saved around 1,000 jobs.”
“Regrettably, however, the reduced estate meant it was inevitable that we would have to make some redundancies. We have informed all colleagues within the organisation of the unfortunate developments that have taken place over the last 18 days.”
“This outcome follows an extremely difficult period for the late-night sector, thanks to the combination of the cost of living crisis hitting younger generations and students particularly hard, as well as the rising National Living Wage alongside increased business rates and costs of operating."
Grant Thornton restructuring partner and joint administrator Jon Roden commented: "Despite an extensive marketing and sale process prior to the administration and the best efforts of the directors and the company's advisors, no interested parties have been identified for a number of sites.”
"Accordingly, the administrators have had to close 17 sites because the commercial prospects of the affected businesses render them unviable to continue to operate resulting in approximately 471 redundancies.”
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