Three weeks after coming out of administration, the club's co-founder talks to RA exclusively about the London venue's recent troubles.
Management at fabric remained cryptic throughout the ordeal, communicating with the public through brief press statements, while the juicy information flowed through such unlikely channels as Twitter and Property Week. But now that the club has been bought out of administration, fabric co-founder Cameron Leslie decided to shed some light on the incident in an exclusive interview with Resident Advisor.
For most of us, fabric's coming out of administration happened very mysteriously. It was bought by Fabric Life, a company that was just incorporated a month ago. Can you tell us what happened in your own words?
I think it's well known and the reasons why fabric was forced into administration. It's unfortunate that fabric was affected so heavily by the matter project, but I'm afraid the world's a very complicated place at the moment with regards to banking and finance. The inability to restructure our financing at matter had an unfortunate and very consequential knock-on effect onto fabric. There was no way of foreseeing that situation when we went into the project in 2007. So it was something that we worked very hard for quite a long time to try and avoid, but as I say, the state of the banking sector in terms of trying to take the pressure off businesses is hard, especially when you're in a sector such as nightclubs which banks perceive to be risky and unattractive. We had an uphill task for quite a long period of time. The reality is that we've shut the doors at matter for the summer, we're in discussions for what that means.
What can you tell me about Fabric Life? How is it different from Fabric 591?
There's really not a lot to talk about with Fabric Life: To anybody on the front end, it's the same fabric. There are a few changes, but the club and the label will be as before, and anyone wanting to enjoy that will be getting the same thing. It's purely to do with a change of ownership and that's it.
It seems lucky that you were bought by people so sympathetic to your vision of the club. How did that happen?
It's a group of people that we'd had a relationship with. There were a number of people that wanted to take the name fabric off the door and do something totally different. Now, that's up to them, if that's what they choose to do and they want to dip into their pockets and buy that space from the administrators. But this was a group that really wanted to preserve fabric as it was, they weren't looking to change it.
So they saw the cultural value of the club.
You mean, as opposed to the financial value?
Well, yes, to a degree. But you still have to realize that fabric wasn't a bad business. It's not a business that was necessarily failing, it was a business forced into administration by the financial structure of a greater group of companies. It was no fault of fabric that that happened to it. It was an unfortunate set of circumstances, but that doesn't mean that fabric was under-performing. Far from it; given the current climate, fabric is doing well. It's not a particularly fantastic time out there at the moment: there's unemployment, two years of graduates without jobs. So fabric has even over-performed, if you like, compared to, I think, most others out there.
Has the atmosphere been different in the club while all this has been going on?
It's been great, to be honest with you. I think when it first broke, there was a sense of "enjoy it while you can." That was misplaced in some ways, but it was impossible to come out and say to anyone "look, I think that's wrong." It was impossible for us to do that, and without knowing the outcome it would have been completely remiss of us. And don't forget: the doors never shut. To anyone who's a regular here, they would have never known the difference if it hadn't been reported otherwise. But due to the press, due to people wanting to talk about it, understandably, people heard about it. But yeah, you did feel a very warm, responsive feedback from people, at the door, in the venue, on Facebook, via email. It's been a very warm, encouraging response.
You mostly blamed the financial crisis for the problems with matter and fabric. Have there been more micro-economic problems as well, for instance with attendance or how much people are spending on drinks?
Absolutely. The attendances have been affected everywhere, everyone that we talk to. We've got a lot of friends who go to a lot of clubs, and it's widely agreed that there are less people going out. It's affecting everybody. It's obvious that with two years of graduates unable to find jobs, there aren't going to be many graduates able to go out. With 30% unemployment among 18 to 25-year-olds, there are less 18 to 25-year-olds going out. But those people who are going out are holding steady. It purely comes down to whether you're financially strong enough to be able to go out for the night.
Some people have said that booking agents and excessively high DJ fees have also seriously hurt clubs, and fabric specifically. Is that true?
It doesn't help, let's just say that. I think there has to be a reality check on the world out there at the moment, for sure. I'm certainly not going to blame DJs or booking agents, because that's not the point. I'm not going to sensationalize an easy soundbite there and say it's because of DJs and agents: It's not. That's a challenge within our business for sure. The reality is that, the artist fees that are being asked for don't go hand-in-hand with dropping attendances. That's basic economics: You can't expect to be paid the same money, because those budgets aren't there in the same way, they're dropping.
There has to be an understanding by everyone in the industry that we've got to work together. And that comes down to that trust and loyalty, those relationships you have with DJs and agents that you're able to support the night rather than just keep driving on with high fees, because you're going to run out of clubs and promoters, with the risk-takers, to be able to support those fees. We're at a very interesting point I think, and that's been purely driven by the financial environment that we're in at the moment, and it's going to require some very grown-up conversations.
Were there any problems within fabric that led to its insolvency?
No. The drop in attendance for fabric was merely as anyone else in the industry, but they wouldn't have been enough on their own. There would have been no reason why fabric would have gone into administration at all were it not for the issues we had in terms of financing matter.
You've said matter's problems mostly stemmed from issues with the Jubilee line. What were the other key issues?
Well, the project was started back in 2006, 2007. That was probably our best year ever at fabric. matter opened in September of 2008, and there was almost a complete corporate collapse by that Christmas. matter was meant to be multi-purpose venue, it wasn't meant to be just a nightclub. There were other revenue streams that contributed to make that project work, and as such, if those revenue streams aren't there, then it puts additional pressure on the venue.
You look at the corporate events market, or the live events market, or the aftershows market, which matter was looking at and it was incredibly tough. If those aren't contributing, then the club element of the business has to over-perform, and the club element was under a lot of pressure: 60% of the weekends it was open, you couldn't get there. When we opened in September of 2008, the Jubilee line was supposed to be finished in January of '09; here we are in July of 2010, and they're saying they're not probably going to be done by the end of this year. So the project was affected by factors way out of our control, and the remedies, the things we tried to do to take that pressure off were heavily influenced by the fact that refinancing in this current world is very hard.
The Independent recently reported that matter is set to go into liquidation. Is that true?
It's probably too early to say. I can say that we're in discussion at the moment, and we're going to know a lot more shortly.
What were some other possible outcomes of all this?
Worst case would have been that someone would have got the premises, shut it down and set up a restaurant or a bowling alley. There were some people floating around that wanted to do something very different from a nightclub and that would have been the worst case. But really, that wouldn't have been particularly logical or sensible, because it's a great space for what we do, and to go and do something else in this kind of climate doesn't make sense.
So you think, to the people that were looking to buy fabric, the way the club currently operates appeared to be the best possible way to use the space?
Definitely, absolutely. And not only the best use of that space, but also that we're the best people to use that space. We found it, and we fill it each and every week. It's coming up on its 11th birthday, and there are still queues around the corner. I think it does alright.