Luminar unveils cost-cutting drive after harsh winter deters clubbers

The company – which owns four venues in Scotland, including the Jam House in Edinburgh – said that like-for-like sales in the year to 25 February were almost 10 per cent down on the previous year.

Luminar has suffered a heavy impact from the recession, as clubbers cut back on going out.

Yesterday, the company said that, while the amount that each customer is spending in its bars and clubs had remained steady, trading in recent weeks has been hit "by persistent poor weather across most of the UK".

The group – which has issued a string of profits warnings over the past year, the latest in January – has already heavily scaled back its expansion plan and said yesterday that its main focus was bringing down costs.

Luminar said: "A rigorous cost-reduction exercise has now commenced across the business and is expected to lower operating costs significantly in the next financial year whilst ensuring focus on key trading priorities."

Former Zavvi boss Simon Douglas was recently recruited as chief executive to replace founder Stephen Thomas.

The company said that the appointment of Douglas – who has also held senior roles at HMV and Virgin Retail – would "help to bring focus to the clearly differentiated strategy of providing a higher quality proposition, with strong content at reasonable prices".

After completing a rights issue to raise 37.5 million last year, Luminar – which is based in Milton Keynes – has kept a tight control on costs, more than halving its capital spending plans from 35m to 15m. The company had said it was looking for a new venue in Glasgow.

The company recently announced a "cross-promotional" trial with music and book retailer HMV, under which nightclubs and music stores will combine to attract each other's customers.

Analysts at Numis Securities warned that while the company was attempting to reshape the business, Luminar's fate would largely be determined by unemployment levels among younger workers, although there were some positive signs.

The analysts said: "Positive like-for-like sales still require youth unemployment to stop increasing, which is possible aided by new UK government initiatives and low exposure to the public sector."

Legislation will also limit the ability of competitors to discount alcohol from the end of April, Numis added.

Luminar employs about 3,300 employees across its head office and across its network of 90 venues, which include the Oceana, Liquid and Lava & Ignite night club chains.