Theme bar operator Luminar is revamping its main Chicago Rock Cafe brand as it seeks to turn around a 20% slide in pretax profits.
The makeover will see a top-to-bottom refit of its oldest and most successful brand, with a new management team brought in to plot the renaissance of its 62 Chicago Rock Cafe outlets, which customers have branded outdated.
The Luton-based group will also launch a major restructuring of its unbranded clubs arm, spending £100m to transform 54 of the division’s 160 sites into one of four concept brands.
Chief executive Stephen Thomas said Luminar had to act as trading conditions were showing no sign of improvement after a difficult summer.
Pretax profits fell 20% to £27m for the six months to 31 August, while sales at its portfolio of clubs and bars fell 5.9% on a like-for-like basis, Luminar said today.
Luminar, which has 306 nightclubs, bars and restaurants across the UK, said market overcapacity was putting the biggest squeeze on business.
Cash-strapped students were also increasingly bypassing bars while revellers wanted quieter venues during the week, opting to go out only at weekends, the company said.
The summer heatwave had put off partygoers from drinking and dancing at its late-night venues, depressing sales.
Any hope of a pick-up during the autumn had failed to materialise, with like-for-like sales staying down 4%, the company said.
Turnover was up 5% to £199.9m as Luminar pursued its plan to expand the number of outlets it operates.
The company said the four bar concepts – Oceana, Lava or Ignite, Liquid and Life – will provide more options for revellers such as boxing, dinner parties and televised sport.
During the past 18 months, it has opened 11 Chicago Rock Cafes and 11 Jumpin Jaks around the UK.
The company also opened two new Oceana units and seven Liquid clubs during the same period.
Fifty of its existing bars and clubs had been renovated, with sums in excess of £250,000 spent on 11 outlets.
Chief executive Stephen Thomas said: “The refurbishment programme is generating improved sales, but the trading environment remains difficult.”
Shareholders received an increased dividend of 3.67p, up from 3.34p. Shares were down nearly 8%, or 33p to 396p, by lunchtime.
References: EGi News 12/11/03
