Fabric Sale May Settle O2 Matter

The parent company behind two popular London nightclubs has been put into administration, with the likelihood that one will be sold to raise the cash needed to bail out the other.

London-based PriceWaterhouseCoopers (PwC) has been appointed as administrator for Fabric 591 Limited, which owns Fabric in Smithfield and Matter, a club located on The O2 arena campus.

The losses suffered at Matter, which is closed and won’t reopen before the autumn, appear to have drained the parent company to insolvency.

The three-story, 2,600-capacity superclub’s accounts for 2008, the first year it was open, showed it made a trading loss of than £1 million. The same accounts showed it owed more than £3 million to various creditors.

Fabric 591, the parent company, is the guarantor to a £3.2 million loan taken out by the club, which last year registered a further trading loss of £191,000.

PwC administrators David Chubb and Colin Haig are trying to sell the Smithfield club “as a going concern,” presumably hoping to save the Matter club.

Fabric 591 owners Keith Reilly and Cameron Leslie are known to have had lengthy negotiations with creditors and potential backers, although it seems they haven’t been able to find a solution that doesn’t involve raising some instant capital.

“[The company] received a number of inquiries from potential purchasers” within 24 hours of being advertised, said a note on property consultants Edward Symmons’ website.

The company has been asked to find a buyer for Fabric and Colin White, from its hospitality and leisure division says he’s anticipating continued interest from other major club operators in London and the southeast.

He says he’s confident of selling the club as a going concern and that it’s expected that it will remain open throughout the summer.