Ipswich: Liquid/Envy could close as parent company calls in administrators
OWNERS of Ipswich nightclub Liquid/Envy have today announced they will call in administrators as they breach bank covenants tomorrow.
The UK’s biggest nightclub owner said today that it will appoint administrators in a move that will put up to 3,000 jobs at risk.
Luminar, which runs Liquid, Oceana and Lava and Ignite clubs in town centres across the UK, said it had no option but to call in administrators.
Its lenders – Lloyds, Barclays and Royal Bank of Scotland – told the group they would not extend a recent period of leniency due to end tomorrow, which will leave Luminar in breach of covenants.
Shares in the group, which employs 3,000 full and part-time staff and operates 75 venues, have been suspended.
The group declined to say when administrators would be appointed.
Luminar has suffered amid the financial gloom as its core market of 18 to 24-year-olds has been hit by high levels of youth unemployment.
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It recorded losses of �198 million in the year to the end of February as sales dropped by 19% to �137 million.
Its lenders threw it a lifeline in May when they agreed to waive banking covenants on a temporary basis to allow the business time to turn itself around. This period of leniency was extended in August but will expire tomorrow.
The group had been trying to drum up more business by diversifying its offer, including holding Jongleurs comedy nights and introducing WooWoo cocktail bars next to its clubs. It had also been running more student nights and live DJs and acts to refresh its appeal
Trading in recent months had been more encouraging although its profit margins had been squeezed as it put on more promotions.
However, the English riots in August added to its woes and had a “material impact on trading”.
The Milton Keynes-based group recently put itself up for sale in an attempt to secure its future. But it only received offers for part of the business and said these were not sufficient to generate returns for shareholders.
Luminar was recently in the headlines after a 22-year-old student was killed in a crush at its Lava & Ignite club in Northampton.
Nabila Nanfuka, of Neasden, north-west London, was fatally injured and two other women taken to hospital in a critical condition.