Luminar to pay rival Cavendish to take on clubs

LONDON (Reuters) - Nightclub operator Luminar (LMR.L) is to pay rival Cavendish Bars to take over 26 of its unwanted clubs, the latest indication that a ban on smoking is savaging the late-night leisure market.

Luminar will pay Cavendish 800,000 pounds to take on the leases and make a near 10 million pound loss on the deal it said on Thursday.

By offloading the clubs to Cavendish, Luminar will be able to concentrate on its core branded clubs like Oceana and Liquid, of which it has almost 100.

"The disposal completes the strategy of streamlining the group's activities," Luminar's Chief Executive Stephen Thomas said in a statement.

"It releases the group from liability for those units going forward and from the cost of having them on our books," he added.

Nightclubs have been some of the hardest hit by a ban on smoking introduced in England and Wales last year.

Many older clubs do not have easily accessible outside spaces meaning nicotine-starved smokers have to queue to get outside to indulge their habits.

New laws which have allowed later pub opening hours have also hurt their businesses as late-night revellers to stay in pubs rather than pay to get into clubs.

Rival nightclub firms CanDu and Summit have been forced into administration while Walkabout and Jongleurs owner Regent Inns (REGI.L) has yet to find a buyer despite having been up for sale for months.

(Reporting by Marc Jones; Editing by Erica Billingham)