Launched with much fanfare in 2021, British events firm K-Pop Lux was meant to bring the world of Korean pop to European shores.
But following three tumultuous years of mounting losses, cancelled festivals and furious fans, the company behind the brand revealed this week it was being forced to wind up its operations.
Up until Monday the previously AIM-listed Live Company Group, which owns K-Pop Lux and children’s entertainment business Live Brick, had been hanging onto hope that it could agree a payment plan with its creditor – the production firm Creative Technology.
But after months of failed negotiations, the group said it had been unable to find a “workable solution” and would be forced to fight for survival in court on Tuesday after the company filed a winding up petition against it.
The news will be a blow to fans, who had been hanging onto hope that the KPOP Lux festival billed for Frankfurt later this year would go ahead.
But with its finances – and reputation – in tatters, this is looking less and less likely by the day.
So how did the firm manage such a dramatic fall from grace in such a short space of time?
K-Pop Lux: Fan fare to nightmare
In a bid to capitalise on Europe’s rising K-Pop craze, Live Company Group—best known for its children’s entertainment brand Brick Live—expanded into the music festival market in 2021.
Their debut event, KPOP.Flex, drew over 65,000 fans to Frankfurt’s Deutsche Bank Park, with tickets selling out so quickly that organisers extended the festival to two days, netting a reported £80,000 profit.
But despite the company hailing it a commercial success, the event was not without its issues.
Attendees flocked to online forums to lament long queues, a shortage of free water, and last minute changes to the lineup, offering an early sign of the difficulties ahead.
These became apparent in November 2022, when the K.FLEX event at the London O2 Arena was officially called off, citing respect for South Korea’s national mourning period following the tragic Halloween crowd crush in Itaewon, Seoul.
South Korean boy group SF9 (shortened from Sensational Feeling 9) at the O2 arena in London.
However, fans on social media were quick to share screenshots showing that large sections of the venue were still unsold just weeks before the concert, sparking accusations that the tragedy was being used as a cover for poor ticket sales and mismanagement.
David Ciclitira, chairman of Live Company Group, defended the cancellation, maintaining that the decision was solely out of respect for the victims and confirming that all ticket holders received refunds.
UK Fans Let Down Again
A year later, UK fans faced further disappointment as K Pop Lux axed the final day of its three-day festival at the O2, attributing the move to lacklustre ticket sales.
Then, just ten days before the event, organisers scrapped the entire festival.
In a statement posted on social media, the company said: “It is with heavy hearts that we announce the postponement of the KPOP LUX London show.
“Despite our efforts to keep the show on, we have exhausted all options. We understand your disappointment and frustration.
“Our goal is to deliver a high-quality event, but unforeseen circumstances have made that impossible at this time. We hope you will consider joining us for a rescheduled date, where we aim to bring you the best possible show.”
Later that year, the Frankfurt event was postponed, leading many fans to opt for refunds rather than risking new hotel bookings for the rescheduled dates.
A Covid-19 hangover?
While the parent company has been vague about the specific reasons behind its cancelled K-pop events, its financial statements over the past five years reveal a business grappling with severe financial instability.
We are still waiting for the group to release its 2023 results, but in 2022 its pre-tax loss widened to £9.4m in 2022, up from £3.2m the year before.
Despite pointing to the pandemic as a key factor in its £8.4m pre-tax loss in 2020, the company’s financial troubles stretch back much further.
In 2017, it reported a pre-tax loss of £5.4m, narrowing to £2.1m in 2018.
The company has previously said that its children’s entertainment arm, Brick Live, has struggled to fund large-scale events since it purchased the brand in 2017, and has yet to transition to a “low-risk licensing model” that could significantly cut costs.
In 2022, the company secured a contract to lead Formula E’s Cape Town race, but failed to secure a sponsor, generating just £20,000 in revenue from the event – the staging fee paid by Formula E.
In its financial review for the year, Live Company Group said it remained hopeful it would strike a deal with a cornerstone investor and that it was “in discussions” with a candidate which had expressed a willingness to loan the firm £1.5m on top of an equity investment.
However, given the firm’s current situation, it appears this potentially life-saving deal did not happen.