Luminar sees gloom on the dancefloor

The Oceana and Liquid club operator, which has been hammered by youth unemployment in the recession, racked up the huge losses for the year to February 25 due to asset writedowns. It has seen like-for-like sales plummet 19.4 per cent during the first 10 weeks of the new financial year.

New chief executive Simon Douglas has closed or sold four of the group's 87 clubs since joining in March and plans to slash 10m in costs from the business this year.

A further five clubs are likely to be sold in the next three months, while Luminar has also appointed a new marketing director in a bid to revitalise its offering. But shares in the group slumped as the group saw no signs of improvement in the market.

Luminar said: "The market weakness has not yet subsided and we see no improvement in customer sentiment.

"The outlook for our customers continues to be uncertain, youth unemployment remains at historically high levels, and spending levels may be constrained for some time to come."

Mr Douglas joins Luminar after a career in retail with high street names such as HMV and Zavvi.

As well as a group-wide crackdown on costs, he wants to improve the music, drinks and customer service standards on offer at Luminar's clubs, making them more "fashionable and relevant" for customers.