Operator profile: NEOS Hospitality

I feel like I’m immediately going to upset this issue’s lead interviewee through the introductory stance of this piece. When chatting with Russell Quelch (pictured above), CEO of NEOS Hospitality, last month, he was quite clear that despite the known history of the business and the journey he has taken to become its leader, NEOS is consciously distancing itself from previous group names Deltic and, to a lesser extent, Rekom UK. I’m sorry, Russell, but in the case of documenting how the UK’s largest nightlife operator transformed into a bar-led business with a few remaining nightclubs, context is kind of everything. I’ll be as brief as possible. 

Deltic, REKOM and NEOS

It’s not a pleasant time to revisit, but let me quickly whisk you back to December 2020. Rekom Group, at the time the biggest nightlife group in the Nordics, created Rekom UK to buy Deltic Group out of an administration caused by Covid-19, taking immediate control of 42 Deltic bars and clubs – these included Pryzm, Atik, Bar & Beyond and more. “We see a huge potential in the UK market for late-night bars and clubs and are certain that the industry will bounce back as soon as Covid-19 restrictions are lifted,” Rekom Group CEO Adam Falbert said at the time. 

Just maybe he was onto something, as less than two years later, Rekom UK’s third quarter generated sales of £30,354,000, a 40% increase on the sales seen during the same (pre-Covid) period in 2019. Just maybe ‘the night’ was far from over. New concepts, such as Heidi’s Bier Bar, were added to the UK portfolio around this time which, for some possessing eager eyes, may have signalled the sign of things to come, demonstrating a minor move away from its core nightclub repertoire. 

Jump forward a year and a half from those encouraging financial results and in February 2024 the news of Rekom UK’s administration broke, resulting in the closure of 17 venues. In reaction, the Night Time Industries Association (NTIA) issued a statement, saying: “Urgent action is required from government and industry stakeholders to provide tailored support measures and financial assistance to safeguard the sector’s survival.” Three months later, Rekom UK separated from the Rekom Group and was renamed NEOS Hospitality, owned by ACG Capital and to be led by chief executive officer Russell Quelch. 

Party goers at NEOS bar brand Bonnie Rogues

Social shifts

What intrigued me during the conversation with Quelch is that not once did he attribute the decline of the UK’s nightclub scene to failings from government. He spoke with empathy about the “issues we’re all facing”, but when evaluating why NEOS is now predominantly a bar business, he doesn’t get close to pointing the finger at Westminster or even the pandemic. 

“You’ve got to be relevant to the market and relevant to what people want,” he says. “Yes, Covid changed things, but the signs were there before. I think nightlife has changed and people are going out earlier and want more experiential occasions. It’s relevant that people want to socialise when they want to socialise – they might want to go out to somewhere fun at 2pm on a Saturday, or at 5pm or 6pm. It used to be that you get to the pub at 7pm and stay to 11pm. If you wanted to stay out, you then go to a nightclub – people were kind of forced into a social habit by licensing legislation.

“Now, people go out when they want and they go to concepts that allow them to socialise when they want. That’s why I think trading windows are important – being able to trade all day. There has been a whole social shift over the last 15 years or so. Personally, I feel that’s been the biggest change in the sector, and I think it has been coming over the last 10 years. That’s why it’s important that we’ve got concepts that can cater for people all day.”

Beers at Bonnie Rogues

The concepts he speaks of are the three that make up the NEOS portfolio – après ski-themed bar Barbara’s Bier Haus, ‘party pub’ Bonnie Rogues and Circuit, its last remaining nightclub offer. These three brands have been rolled out across the NEOS estate since summer 2024, with the pub and bar offer undoubtedly taking priority. Don’t get me wrong, the investments the group has made in order to transform Pryzms in Kingston and Bristol into Circuits are sizeable (Brighton Pryzm will be the third and final transformation), but there’s no question the ‘party pub’ model is what NEOS is focussed on. That note of investment is another factor Quelch attributes to the decline in nightclub interest and numbers.

“People don’t want to go to uninvested sites,” he says. “It’s just the way it is. There has to be continual maintenance and investment into businesses if you want to survive. What Covid actually did was give existing businesses a five-year window of zero investment. At the same time, new concepts were coming to market. When things reopened, operators of nightclubs needed to actually get business going and make some money first. Then they could ask the question ‘shall we invest?’ But in that time, new concepts had already come along, and, you know, people like new things, don’t they? It’s just human nature. 

“Most businesses that have been out there a long time have been about continual investment and continual development. Take Starbucks, they don’t look and feel the same as they did 20 years ago – they’ve evolved with technology based on how people socialise and how people go for a coffee. You need to keep evolving a concept so that it stays in line with what the market wants.”

Newly improved spaces at Circuit in Kingston

Join our club

Data suggests that while the post-Covid period was hardest on clubs, the freefall in the number of venues may have come to an end. Research by NTIA and CGA from the beginning of the year showed late-night venue numbers increased by 2% over the 12 months to the end of March 2025. Indeed, despite NEOS putting a lot of energy into its bar brands, one can’t question the value it sees in an adapted nightclub offer. Adapted being the key word. At the end of 2024, for example, it pumped £2.5m into its Bristol Pryzm site, dividing it into two new spaces: Circuit and Barbara’s Bier Haus. It then went on to do the same thing with its Kingston venue, although it brought in Bonnie instead of Barbara. 

“The estate was more nightclub-heavy and the main focus used to be that 10.30pm until 2am timeslot,” says Quelch. “But now it is all about the early evening, the live music and the drinks. We’ve got six nightclubs, but that’s six out of 20 venues and they’re only in there because of historical leases. 

“With Brighton [Pryzm], our intention is to rebrand and reutilise the space in the same way we’ve done in Kingston and Bristol. At some point in the next 18 months, we intend on rebranding Brighton, which is the last Pryzm, so the brand won’t be in the estate any longer. We’ll increase the bar space, but reduce the nightclub space. We still see there’s a market for nightclubs and we have some nightclubs trading well, but utilising the space more efficiently is definitely a good win, as it is where the market is at and is what people want.”

It’s also worth mentioning the NEOS collaboration with local Kingston record shop and gig promoter Banquet Records here. While Quelch can’t see the set-up being replicated in other venues, Banquet uses Circuit (and Pryzm before it) to host big-name gigs on a regular basis. Before the end of the year, Circuit will welcome acts such as Knucks (ask your kids), The Charlatans, Cat Burns, James Morrison, Jake Bugg and more through its doors, all because of Banquet’s pulling power. It’s a nice partnership to have.

“We’ve got a good relationship with Jon [Tolley] and Banquet,” says Quelch. “They put numerous events on and it’s good for us because it’s outside of the core trading time for the club, and then we get a benefit in the bar of the pre- and post-concert, so it’s a really good addition for us as a business. It has been a good partnership and we want it to continue.”

How’s business? 

So, is the approach working? Has the main move away from nightclubs and into the bar space proved profitable for the group? The aforementioned NTIA and CGA research indicates particular resilience in bars, where numbers have risen by 7.6% since March 2024, equivalent to nearly seven net new openings per week. According to the data, growth has been powered by the widely-documented interest in experience-based nights out, including at competitive socialising and themed bars, some of which have succeeded nightclubs. A particularly prevalent point for NEOS, of course. Is the strategy a success? 

“Generally, business is good and going in the right direction,” says Quelch. “Our core focus is the 5pm to midnight timeslot now. We’ve had a number of investments this year that we’re happy with and they’re all delivering. We’ve been on an 18-month run of strategy to rebrand and reposition the business, whether that’s utilising spaces better, growing the bar space within the business, or transitioning and repositioning. 

“We’ve got 20 sites, after the opening of Barbara’s Bier Haus in Brighton. Overall, we’re really pleased about trade. It’s tough, for all the reasons that we know about, but fundamentally we’re comfortable and happy with where we’re at. We feel that the brands that we’ve got are working and they’re delivering, and we’re excited for what we can do in the next 18 months.”

In terms of exact numbers, Quelch is a little quiet, but explains this is because they’re still in a “rebrand phase”. He does this calmly, but there’s a sense he wants to talk about some of the impressive sales these three brands are delivering. There’s no rush of course, as NEOS seems to be in a good place. Considering the tricky events that led to its creation, Quelch now finds himself steering a ship carrying three brands, two of which that are on their way to national recognition through the growth journey they are on.  

“We’re regularly 8-12% ahead of where we expected to be on the top line,” he concludes. “ACG want to grow the business over the next two to three years – they want to keep growing the bar business. It is all focused on Bonnie’s and Barbara’s.

“We just want to keep adding the right sites over the next few years. We don’t want to add just for the sake of it, we want to be in the big cities and we want to be in the right locations within those cities. We’re definitely looking at three to four a year over the next few years.”  

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