New information has arisen this week, showing that two of York’s most popular student nightclubs, Tru and The Gallery, face imminent closure.
An anonymous source close to Nouse, in contact with a member of The Gallery management staff, revealed that those working at the club had been informed that unless there was a significant turnaround in the profitability of the venue in the next six months, then it would have to be sold.
The rumours of closure have also been reinforced by both Tru and The Gallery’s refusal to meet with Nouse to discuss the issue, despite repeated requests.
Furthermore, it was discovered that the club manager of Tru, Chris Bateman, even made a phone call to the manager of The Gallery to warn of Nouse‘s investigation.
Tru and The Gallery are both presently owned and operated by Luminar Group Holdings Plc, one of the largest club owning companies in the UK.
In their recently released financial report, it was revealed that in the last 52 weeks, Luminar’s share price has peaked at 166.00p and fallen to a low of 33.25p.
The current price is 34.5p. It was also shown that their per centage growth in earnings per share (EPS Growth) forecast for the end of Luminar’s financial year on 28th February 2010 is -71 per cent.
The group, which on 27 August 2009 owned 88 late night venues, also made a loss of £300,000 in the 6 month period prior to this date, compared with a profit of £3.4m in the same time frame in 2008. Moreover, in December 2009, sales were 13.8 per cent lower than those the same month in 2008.
Although both clubs are attended weekly by both the University of York and York St John students, Nouse’s source reported that student nights have proved not as profitable as the full price nights on Friday and Saturday. Even these nights, however, are now attended less by local club-goers than in more financially stable times.
In October 2009, the Financial Times reported: “Stephen Thomas, Chief Executive (of Luminar), said rising unemployment amongst Luminar’s core market of young clubbers was to blame for the sharp decline in trade.” It is thought to be likely that the possible closure will result in a buy-out by another company who would then revamp and relaunch the venue(s).
Reuters reported on the likelihood of such a takeover in January of this year, stating that: “HMV Group plc (HMV.L) is in advanced talks with nightclub operator Luminar (LMR.L) over a possible partnership.”
Reuters’ source stated: “I would expect it to blossom into an outright takeover.”
On visiting The Gallery, Nouse were met with hostility and told to leave the premises immediately. This reluctance to deny the closure, or even talk about the future of both Tru and The Gallery nightclubs, has been seen by many as a confirmation of the truth of the rumours.
The fact that Tru only opened as a club in 2008 after a £1million renovation of Toff’s nightclub, which was what it was previously named, has also been seen as a cause of the financial difficulties being faced by the venue.
Due to the poor financial climate and lack of attendance, it is possible that the club has struggled to recuperate the money invested in the development. The news that two of the most visited nightclubs could potentially close was met with outrage by many students.
Sophie Handson, a first year University of York student, expressed her dismay, commenting: “I can’t believe The Gallery might be closing, I’m so annoyed. It’s my favourite night of the week.”
Kate Davey, another first year student, took a similar view, saying: “Where are students supposed to go now? Going out in York is going to be even more boring than before.”