Nightclubs are preparing to axe thousands of jobs as the industry faces collapse, The Mail on Sunday can reveal.
Britain’s biggest nightclub operator has launched a consultation to slash 402 roles ahead of crisis talks with the Government on Monday.
The move by the Deltic Group, which runs 53 clubs and late-night bars across the UK, will mean losing 10 per cent of its 4,000 employees.
Chief executive Peter Marks warned more redundancies could follow unless the Government provides urgent support. ‘There will be far more job losses if we don’t get something material in the next six weeks,’ he added. ‘As an industry, we won’t get through November.’
Entrepreneur Charlie Gilkes – whose Inception Group runs some of London’s best known venues including Maggie’s Club, as well as bars such as Barts, Bunga Bunga and Mr Fogg’s – said clubs were already struggling to pay the 10 per cent furlough contributions that kicked in last week.
Contributions rise to 20 per cent in October and then 100 per cent in November when the scheme ends.
He said Maggie’s – one of Prince Harry’s former haunts – will ‘struggle’ without the state support and is one of many nightclubs that could have to re-open as a bar.
‘If we get to November, and we are paying full wages, it will put us in a very difficult situation,’ Gilkes said. His firm has made an undisclosed number of job cuts across its 11 sites.
Tomorrow, Deltic chief Marks and other bosses from the sector will meet Business Minister Paul Scully to try to thrash out a rescue plan.
Many fear bankruptcy after paying fixed costs since closing in March with no date set for re-opening. They want the Government to confirm a ‘roadmap’ to get the night-life sector back on its feet. They will ask for an extension of the furlough scheme, grants linked to venues’ rateable value, or help with commercial rents.
According to a survey by the Night Time Industries Association (NTIA), which represents 1,200 late bars, clubs, casinos and live music venues, 71 per cent will make more than half their workforce redundant from September while 58 per cent said they will be bust within two months. More than 80 per cent will lay off staff when the furlough scheme ends in November.
The night-time economy employs 1.3million people, and contributes £66billion each year to Britain’s GDP.
Michael Kill, chief executive of the NTIA, said: ‘I don’t think the Government recognises how many people could be made redundant. There are a lot of businesses out there which are really on the edge now.’
The Deltic Group had a £106million annual turnover and £12million profit before the crisis but is forecast to lose £17million this year. It is burning through £600,000 per month in fixed costs, plus £1million in rent, which it cannot pay.