In the first half of the year ended 26 February 2011, Luminar saw sales declines of 21 per cent.
Although the rate of decline improved during the second half, down 15 per cent compared to last year, the group – which operates 77 nightclubs under the Oceana and Liquid brands – recorded a full year loss of £1.1m, compared to a profit of £5.5m in 2010.
Unemployment hits business
“The late night dancing market has continued to be difficult with factors such as the economic environment, high levels of youth unemployment and lower disposable incomes, together with a highly competitive market and severe adverse weather conditions during peak trading periods, contributing to the challenges,” said Luminar.
“The financial results for the year ended 26 February 2011 reflect these trading conditions.”
However, Luminar, which refinanced its debt in December 2010, said its banking groups are supporting the business and will continue to be flexible until the end of August, when a longer-term debt restructuring will be agreed.
Broader consumer appeal
At the same time, Luminar has also focused on diversifying its business to increase its appeal to a broader customer base.
Currently, Luminar’s main customers are aged 18-24, and include many students. However, the introduction of new initiatives such as Jongleurs comedy nights are said to be attracting a wider audience.
Luminar is also focusing on improving customer service and value. It has introduced a cocktail range throughout its estate for the first time, and is also serving premium drink brands as part of an overall strategy of providing a high quality value for money.
Early indications
“We are confident that these initiatives pave the way to enable the Group to offer a comprehensive late night entertainment proposition. We are encouraged by early indications that these initiatives are driving footfall and spend per head,” said Luminar.
Simon Douglas, chief executive officer said: "The results for the year, while disappointing, show some early indications of improvements in like for like trends. Equally encouraging is the early evidence that initiatives introduced midway through the year appear to be gaining traction and are diversifying our offerings and revenue streams."