Luminar to cut costs

Luminar, the embattled nightclub operator, is to start a rigorous cost reduction exercise after revealing it had seen no upturn in recent trading and reported that like-for-like sales for 2009 were down by 9.9%.

The group, which recently saw the departure of it chief executive and founder Stephen Thomas, said it had been "severely affected by the persistent poor weather" in the past two months, in its pre-close update for the year ended 25 February, and that full year profits would be in line with the board's expectations.

Sales per customer and gross margins have remained at similar levels to the previous year, added the Oceana and Liquid operator.

At the half-year point Luminar's gross cash margins were down by £5.3m on 2008.

It hoped the recent appointment of Simon Douglas, the former Zavvi boss, as chief executive would, "help to bring focus to the clearly differentiated strategy of providing a higher quality proposition, with strong content, at reasonable prices."

M&C Report previously revealed how the operator was trimming 40 staff from its head office in a bid to cut costs.

Luminar reported that it continued to trade within its debt covenants and continued to generate cash with which to reduce borrowings. It reduced its net borrowings by £49m to £93m during the course of its financial year.

The nightclub group has seen a recent fillip in its share prices leading some to speculate that a private equity company is considering a bid.

3D Entertainment (3DE), the Chicago Rock Café operator that was 49% owned by Luminar, collapsed into administration this month - with the majority of the business being acquired by Sun European Partners. The overall value of the equity and investment in 3DE on Luminar's balance sheet last August was £17.3m, and there was a trading debt for services provided to 3DE of approximately £0.8m.

But Luminar is only expected to get back a loan guarantee of around £2m as a result of the collapse of 3DE.