Administrators call time on bar and nightclub firm

THE firm that runs Edinburgh's biggest nightclub along with a dozen venues across Scotland has been plunged into administration.

Castle Inns, which employs 400 staff, has called in the administrators. The firm, which was set up 28 years ago, runs the City nightclub and Sportsters bar in Market Street and also owns nightclubs in central Scotland, Fife, Perthshire and Argyll.

Administrators Deloitte said Castle Inns had faced "significant cashflow difficulties" in recent months, but that the premises would all continue to trade until a buyer became available.

City nightclub has hosted a string of high-profile events in recent years, including the star-studded Perrier Awards marking the end of the Festival. City was also where Pippa Middleton famously followed in the footsteps of her sister Kate and took to the catwalk to showcase clothes by Jean-Paul Gaultier and Vivienne Westwood in March 2004, as the Evening News revealed last month.

The nightclub is still due to host five Fringe Festival events, including the Street Dance Championships, the Breakdance Championships and a performance by the hypnotist Titan Knight.

The firm's founders, brothers Paul and Stephen Smith, who have been running bars and clubs since they were teenagers and run Castle Inns from Stirling, were not available to comment yesterday, but a statement on their website said Deloitte is now managing the company.

John Reid, joint administrator and partner in Deloitte's restructuring services team, said: "The company had faced significant cashflow difficulties in recent months as a result of the economic downturn, increased costs faced by the business, coupled by reduced consumer spending."

Mr Reid and fellow administrator Brian Milne were brought in to Castle Inns on July 8. Deloitte said the firm currently employees more than 400 full and part-time staff.

Castle Inns operates with a number of freehold and leasehold public houses and nightclubs throughout central Scotland under the Sportsters and City nightclub brand.

A spokesman for the Scottish Licensed Trade Association said: "We are continuing to see some of the most difficult trading conditions for a generation and there have been some 800 pubs closed since the smoking ban came in. There has been a move towards people drinking at home rather than socialising in pubs."