Following matter’s closure, rumours are abound that fabric might follow too. Here is my assessment:
For the last accounts filed for the year ending 2008, they had a negative net worth of £150k, and had made a loss of approx £220k, but that was on a turn-over of £8m.
Add on a loss of £180k that I read earlier for year ending 2009 (not filed at Companies House yet), this would give them a negative net worth of £330k, assuming there was no other financial input from the backers – I’m not sure how much the owners are worth, if they are able or willing to do so.
However I’m also led to believe that fabric is guarantor to matter, and if matter are £3m in debt and traded at a reputed loss of £1m last year, one can understand why matter had to stop trading immediately.
fabric was trading at a small profit in years prior to 2008 (when the recession kicked in) so I believe it is still a going concern, however I expect that it would need a restructure to continue. Which is where administrators would come in, and this is what my money is on. Less profitable parts of the business, less value-add employees (88 employees in 2008) and less profitable nights would have to go – as would over-priced DJs unless those particular nights were profitable (I have no idea of which individual nights are the most profitable).
Either that or they need to find a buyer, willing also to pay enough to cover the guarantee of matter. And would a new buyer let it continue to trade as an underground venue, or would they be looking at ways of making a quicker buck?
Credit rating agencies rate fabric as a higher risk of business failure than average, and that was on the figures from 2008 – long before matter failed.
My conclusion is that they may have to go into administration (unless the owners can pump money in). Fingers crossed it comes through the other side – London without fabric to all those who love dance music would be like London without Buckingham Palace to all the tourists.