One of the worst-kept secrets in town, the closure of the Stellar bar, has been confirmed by Trust House chief executive Bernard Teahan.
Mr Teahan confirmed yesterday the bar will close, probably by the end of the month, and that staff will be offered priority for other jobs at Trust outlets.
In
his regular column for the Times-Age, Mr Teahan said that Stellar had not been profitable since the Trust purchased it in 2004, despite a great deal of management effort to make it so.
"In reassessing its future, the conclusion has been reached that its trading patterns and operating costs are very unlikely to generate any profit, and that in any event, substantial reinvestment will be necessary. I very much doubt that Stellar could ever be profitable.
"By far the greater amount of its sales is generated on one night, and trading at other times is light.
"The costs of operating on this site, for this market, are excessive and further looking for opportunities to reduce costs and increase sales will not solve the problem," he said.
Mr Teahan said closure of Stellar was consistent with Trust policy that each of the Trust's 24 business units generated acceptable profits, or will do so in the foreseeable future.
"Competition brings many advantages. But it also throws the spotlight on those businesses not able to generate sufficient sales to cover the costs of operating," he said.
Stellar opened in October 2001 after its Palmerston North-based developers had spent more than $400,000 upgrading the former Masonic Lodge building in Chapel Street.
The lodge, built in 1923, withstood a major test to its reinforced concrete structure when it became the only building available for public use after the 1942 earthquake.
The hall became so popular for weekly dances with army and air force personnel stationed in the area the floor had to be replaced, having been worn thin by the hobnails of the servicemen's boots.
One of the owners of the original Stellar venture said the town needed something "upmarket and fresh".
