Luminar, the firm that owns Lava Ignite, has gone into administration following a failure to meet the October 27th deadline for its banking covenants.
According to a report published by the Financial Times, the group owes approximately £85m to Lloyds TSB, Barclays and RBS. The banks gave Luminar a temporary banking waive in May, which they then extended in August. The deadline has now expired.
The administration comes after several years of financial underperformance. Luminar was hit hard by the smoking ban, changes to pub licencing laws and the riots over the summer. In particular, the economic downturn has affected the chain’s core 18-24 year old customer base because of increasing levels of youth unemployment.
Luminar’s shares were supended at 0.7p on Wednesday, having fallen from over 600p in the last five years.
Another recent incident saw the chain having to stand by its safety and security procedures when a stampede in its Northampton club led to the death of 22 year old Nabila Nanfuka. The crush happened in the early hours of last Wednesday as a fire alarm caused the crowd to rush for the exits. One 19 year old remains in hospital in critical condition.
Lava Ignite has maintained that “customer safety is the number one priority” and that the chain “already complies with and exceeds” stringent regulations on late night entertainment. The Northampton club remains closed pending a police investigation and an internal inquiry.
Lava Ignite’s “Shark End” on Wednesdays is one of Oxford’s most popular club nights. Izzy Fitzharris, a second year linguist, commented, “It’s scary that something like that could happen on a night out”. Classicist Keir Macdonald agreed, emphasising that the club’s responsibility is “not just getting people in but also safety”.
“The queue for Park End often stretches past The Junction and inside it’s like being on a Piccadilly line train at rush hour” said second year Adam Rachlin, however he rejected calls to lower capacity, arguing that to do so would “ruin the ambience”.
Tributes to Nanfuka, who was studying Leisure and Tourism at the University of Northampton, described her as “one in a million” and “a beautiful person”. It remains unclear what the future for Lava Ignite will be.
