Hugos Lounge Kings Cross enters voluntary administration

28 August, 2015 by
Aoife Boothroyd

Once one of Sydney’s most vibrant inner city hotspots, Hugos Lounge Kings Cross will be closing its doors for good after being placed into voluntary administration this week.

The 15 year old venue was placed into voluntary administration on Wednesday 29 July following a 60 percent decline in revenue since 2012.

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Speaking with Fairfax, owner of the venue, Dave Evans said that revenues started to decline in 2012 when an initial batch of alcohol restrictions were introduced into the Kings Cross area. Evans says that revenues continued to dive with the introduction of the controversial lockout laws in 2014, resulting in the cutting of trading hours and the loss of 100 jobs.

“We said it would destroy business, we said it would destroy staff, and here we are,” said Evans.

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Evans says that during its 15 year tenure, Hugos Lounge had never received a strike under the NSW government’s “Three Strike” policy despite having over 6,000 patrons per week at its peak.

“Hugos had no trouble with alcohol, which as it turns out is more than Barry O’Farrell can say,” says Evans referring to the former premier’s infamous bottle of Penfolds Grange that he received from AWH boss Nick Girolamo as a gift and failed to declare.

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The lockout laws were announced in late January 2014 and rushed through parliament following the death of Sydney teenager Daniel Christie, with the aim to reducing the level of alcohol-fuelled violence across the city’s nightclub hotspots.

The legislation requires bottle shops to close their doors at 10pm and prevents patrons from entering a venue for the first time after 1.30am. The lockout laws also prevent pubs and clubs from serving alcohol to patrons after 3am. 

According to a City of Sydney submission to a NSW Legislative Assembly inquiry into alcohol violence in September last year, pedestrian traffic on King’s Cross’ Darlinghurst Road has fallen by 84 percent when compared with 2012 levels.

Businesses in the area have also reported a 40 percent loss in revenue since the lock-out laws were introduced.

Despite a reduction of crime rates within the lockout zone, crossbench senator, David Leyonhjelm says that crime rates in surrounding suburbs have increased significantly. According to NSW Bureau of Crime Statistics, the inner west suburb of Newtown has recorded an 18 percent increase in violent alcohol-related crime since the laws were introduced. Other neighbouring suburbs including Petersham and Glebe have also experienced an increase in alcohol-related incidences.

"Next their call will be for the lockouts to be extended to Newtown. So then they might move to Paddington or Bondi – so where does it end?" says Leyonhjelm.

Eariler this month, La Cita Latin Restaurant Bar & Club located at Sydney's Darling Harbour collapsed into liquidation with its directors stating that the venue experienced a “radical drop in turnover” since the lockout laws were introduced.

As reported by Smart Company, La Cita’s owners say that they had an annual turnover of $2 million and employed 10 staff prior to the lockout laws, but have since accumulated around $580,000 in debt.