The lights go out for the nightclub market

Its bad news for shareholders of Luminar - but this news story is packed with rich potential for a business studies lesson…

Luminar Group Holdings plc is quoted public company that operates a portfolio of nightclub brands.

The share price of Luminar fell by a third last week when management announced some very poor trading results. According to this report in The Times:

“Luminar said that while investment in its venues had driven higher spend per head, admissions had dropped sharply in August and September — a decline exacerbated by heavy discounting among competitors, many of which were employing “all you can drink” offers to attract customers.”

Currently, more than 80% of Luminar nightclub revenues are generated by their core 18-24 year-old customers - a population that has been hit particularly hard by the increase in youth unemployment.

An interesting change in segmentation looks on the cards for Luminar according to the article as Luminar focuses on the “divorced, single and dumped” market.”

The nightclub market probably outperforms other leisure markets during times of economic boom, but it looks much weaker when consumer spending is cut back. It could be some time before the lights come back on