The company that runs a Brighton night club and cocktail bar has been sold for £10 million as the coronavirus restrictions continue to affect food, drink and hospitality businesses.
Deltic, which owned the Pryzm night club in West Street and the linked Steinbeck and Shaw cocktail bar, has been bought out of administration by a Scandinavian company, Rekom Group.
Rekom bought 44 out Deltic’s 55 venues and the Danish company’s new British business has 1,300 staff on its books although few are working at the moment.
Pryzm in West Street was originally the Top Rank Suite and has operated under a number of names over the past 55 years, including the Event and Oceana.
Deltic went into administration last year, having been set up when the Brighton venues’ previous owner Luminar collapsed in 2011. Deltic chief executive Peter Marks will continue to run the British business for Rekom.
Mr Marks has criticised the government’s response to the covid pandemic after clubs were first ordered to shut last March, saying that the lack of formal support “slowly choked us to death”.
The business cut 1,000 jobs and turned parts of its clubs into bars but overall it was losing about £1 million a month.
The trade body, the Night Time Industries Association, said that without proper financial support, three quarters of clubs and late-night venues faced permanent closure.
The association said that the government’s furlough scheme and grants of up to £3,000 a month were not enough for the big night clubs where the costs were much higher.
An administrator’s report said that Deltic had substantial creditor arrears that it was unable to pay including rent arrears of more than £9 million to the end of November. The company owed the Revenue and Customs about £7.7 million in taxes.
Deltic had almost £900,000 in the bank when it went into administration and sub-tenants at five properties owing £212,000 in rent arrears.
The company owed £9.6 million to a secured creditor with a repayment in full expected.
The report said that Deltic had made progress with a turnaround plan before the pandemic.
In the year to last February, Deltic’s turnover was about £103 million, similar to the previous year and down on the year before. The business made a profit of about £9 million, compared with a £15.8 million loss in the previous year.
Last month the Revolution Bars Group, which also has a premises in West Street, Brighton, criticised the government when it reported a loss for the year to June of almost £32 million before tax on turnover of £110 million, down from £151 million.
In the 24 weeks after its financial year-end, Revolution said that turnover had dropped to £20.6 million, down from £74.1 million in the same period a year earlier.
Even in August, when the Eat Out to Help Out scheme was operating, takings were just over four fifths of their usual level.
Chief executive Rob Pitcher said: “The UK government’s actions towards wet-led bars and late-night hospitality are nothing short of scandalous.
“It has little evidence to justify the severe restrictions that have been imposed and it is deliberately sacrificing businesses and people’s livelihoods.”
Any bets on a planning application soon to demolish and replace with flats, student or not?
The Business has been bought, not the freehold which I think is owned by The Council.That whole area was up for redevelopment to extend Churchill Sq so it could be a Hotel or Apartments in the future.