The boss of the UK’s largest nightclub operator has blamed clean-living students unwilling to go out during the week for the closure of some of its clubs.
Rekom UK, who own the PRYZM and Atik club brands, announced the closure of 17 of their venues earlier this month with the loss of 500 jobs.
Company CEO Peter Marks said the rise in the cost of living and a drop in students’ alcohol consumption had also affected his business, which had 50 sites.
Speaking to the BBC, he pointed out that a recent midweek trip to Leeds had opened his eyes to the scale of the problem.
He added: ‘I walked around between 7pm and 11pm and there were no more than 200 people out in the city.
Peter Marks, CEO of Rekom UK, which is the UK’s biggest nighclub operator
A large number of Rekom venues closed down last month with 500 jobs lost
Pryzm Watford, one of the companies flagship venues, was one of the venues to close
Atik Nightclub in Windsor, Berkshire which closed permanently earlier this month
‘Two years before it would have been really quite busy and buzzing.’
He added that cost of living pressures for the business and customers alike were ‘the biggest issue that we face’.
He continued: ‘For every £100 we take, we are spending between £30 and £40 on wages. We’ve had businesses that used to make £500,000 then go on to lose £400,000. Just in the two-year period.’
The Rekom UK boss also urged the government to reduce VAT rates to ease the pressure on the hospitality industry.
He said: ‘The night time economy is going through a tough time. It does need some help. I believe the only sort of help that is material and will make the difference is actually a VAT cut to 10%.’
Rekom’s biggest earners have typically been large nightclubs in city centres geared to the student market, such as in Leeds, Nottingham and Birmingham.
In a previous interview last year, Mr Marks, a veteran nightclub executive, said: ‘The student pound is stretched and we have chosen not to open a lot of early week sessions.
‘Stakeholders are looking for independent verification that the right thing to do is to concentrate our efforts more in the bar market, which has a wider trading window and wider demographic.’
A bar inside PRYZM nightclub, one of Rekom UK’s biggest brands along with Atik
The Rekom UK closures earlier this month include six PRYZM nightclubs and four Atik sites
Club Batchwood in St Albans closed during the Covid-19 pandemic
Built in 1874 for Edmund Beckett in the Queen Anne style, Batchwood Hall has served a variety of uses over the years
Rekom UK was formerly the Deltic Group and was purchased by it’s current Scandinavian owners in 2020.
The Covid-19 pandemic forced the closure of several of it’s venues including Club Batchwood, which was set inside a gorgeous 19th-century manor house on a golf club.
Batchwood Hall was designed and built by Sir Edmund Beckett, later Lord Grimthorpe, who lived there himself. It was later bought by St Albans City Council in 1930.
It became a nightclub in the 1980s, when it even saw a performance from Kanye West as a DJ.
Retail analyst Catherine Shuttleworth also said Rekom’s problems were a result of young people having more choice on where to spend their money.
She said: ‘There are bars with darts and golf, many more food options and lots of pop up stuff – especially in summer.
‘The behaviour of young people has also changed since the pandemic, with those who turned 18 in lockdown not getting into the habit of going out clubbing.’
Chloe Field from the National Union of Students (NUS) added: ‘The cost-of-living crisis means students also don’t have the time to see friends.
‘65% of students [according to a recent NUS survey] who work are working more than they did last year. This means that, between full-time study and part-time work, many can’t socialise at all.’
The closures earlier this month include six PRYZM nightclubs and four Atik sites across the country, as well as Jumpin Jaks in Coventry and Level 17 in Swansea.
Administrators Grant Thornton had been unable to find a buyer for a number of venues despite an ‘extensive’ marketing process.
Revolution Bars Group also shut eight sites across England in January after blaming the cost-of-living crisis for hitting the spending power of its younger customers.
It comes after a new Night Time Industries Association (NTIA) report reveals an enormous 396 clubs have been shuttered since 2020.
In 2023, England, Wales, and Scotland lost four percent of its nightclubs and saw a 9 percent decrease in visitors, the report found.