Rekom UK has filed a Notice of Intention (NoI) to appoint administrators to a number of companies within the group, as cost-of-living pressures continue to impact its core young adult and student customer base.
Chairman Peter Marks said the group “cannot continue in its current structure” due to soaring costs, and that a restructure was necessary to build a stronger business.
The move gives the PRYZM operator breathing space and protection to negotiate with landlords and other stakeholders to reach a solution.
While bar brands Heidi’s Bier Bar and Proud Mary are performing well, the restructure could well lead to the closure of some of the group’s nightclubs.
The Nordic arm of the business is not affected.
Peter Marks, chairman of Rekom UK, said: “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 £120k 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.”
