The company, which is the UK’s largest nightclub operator, filed the notice today.
Rekom UK chairman Peter Marks said the move gives the business “breathing space and protection” to work with its lenders, landlords and stakeholders to come up with the best solution from the group going forward.
He 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 and student market, together with the cost-of-doing-business crisis."
Inflation rises
For example, he said, while the government’s Autumn 2023 Statement saved Rekom UK £120k on its £5m rates bill, it meant the company had to find an extra £2m in wages.
“Not only that, the cost of goods and energy have also seen inflation-busting rises," said Marks. "This has led to us having to accept that the group cannot continue in its current structure.”
But it’s not all bad news. Marks continued: “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.
Company restructure
“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.”
This does not affect the Nordic arm of Rekom.
Last September, Rekom released data that showed the cost-of-living crisis was impacting Brits’ social lives, with more than a third (34.9%) cutting back on the number of times they went on nights out since autumn 2022.
Marks said: “Right now, more important than ever, you have a situation where you can’t just open the door and see who comes. That’s just not the game.”