First Leisure, the former conglomerate that shrank to a nightclubs-and-pubs business, has been forced into administrative receivership in a knock-on from the collapse of Springwood earlier this year
After the owner of the McClusky's chain went into receivership in February, First Leisure found itself liable for the leases on properties it had passed on to Springwood in August 2002.
As well as suffering tough trading conditions at its 28 nightclubs, First Leisure was already struggling with other lease liabilities that had reverted back to the company when Mustard, the owner of the Brannigans chain it sold off in 2000, went bust in 2002.
Negotiations with landlords to try to reduce those burdens failed, and the receivers, RSM Robson Rhodes, were called in by the company's directors yesterday.
It is believed First Leisure's directors are negotiating with the receivers to buy the best of the company's sites and relaunch with fresh finance.
Simon Bower of Robson Rhodes said: "First Leisure is the latest casualty of the decline in the nightclub sector. The group has, however, a core business that is essentially sound, around which management have developed sensible plans for the future.
"Our key objectives are to preserve the business and secure the employment of the 1,600 employees. We will be working with management and staff to ensure it's business as usual."
Ironically the bulk of Springwood's estate is now being run by Nexum, a company led by Paul Kinsey, the former chief executive of First Leisure who left the company in January last year "by mutual consent", after poor Christmas trading.
At one time First Leisure under its former chairman, Michael Grade, ran operations as diverse as bingo clubs, resorts and health and fitness operations as well as nightclubs and restaurants. The health clubs side was floated off as Esporta in 2000.
