The UK’s largest nightclub operator, Deltic Group, is seeking a buyer as it fights to stave off bankruptcy after the seven-month closure of its venues during the pandemic drained the business of cash.
Its chief executive, Peter Marks, lashed out at the government for failing to offer more support to the nightclub industry, as he confirmed the sale plan.
Nightclubs are among the very few businesses that have been unable to reopen at all since Covid-19 hit the UK and Marks said the government’s failure to offer more support had “slowly choked us to death”.
In an effort to ensure its survival, Deltic has already cut 1,000 staff – about half its headcount – and has repurposed parts of its clubs as bars, allowing it to reopen 10% of total floor space.
But Marks said this was bringing in £80,000 a month, compared with the £1m that the company is burning through, leaving it facing running out of cash by December.
Marks said he was looking at every option to secure the survival of the business, which runs 53 clubs, including Pryzm in Birmingham and Eden in Newcastle and Manchester.
The options could include a company voluntary arrangement (CVA) – a form of insolvency that typically involves site closures and an agreement from creditors to cut rents or fees.
But Marks, who told the Guardian in August that the company could not survive without more support from the government, said he was also exploring a sale.
“We have to look at every option going and part of that is to see what other capital is out there to get the business through this,” he told the Financial Times, which first reported the story.
Michael Kill, chief executive of trade body the Night Time Industries Association, said: “As the weeks and days go on we’re going to see more and more of this happening.”
“People within the business will be concerned about their future and it epitomises the concern in our sector, whose businesses have been restricted for a long time without considered and proportionate support.”
“For many companies, we’ve missed the boat. Now we’re starting to lose businesses and the government needs to act at pace to stem this loss.
“Our night-time economy will slip away if we’re not careful.”