Quest operator pulls the plug on £1m Merry Hill attraction after big losses

A £1m adventure playground attraction at the Merry Hill shopping centre is to close after its operators incurred big losses.

York-based Paragon Entertainment opened its Quest Family Entertainment Centre attraction at the mall two years ago but announced today it was exercising a clause in its lease and would pull the plug on the facility in six months time.

It has not disclosed how many jobs will be lost as a result of the closure.

In 2012, the company agreed a series of leases with the centre’s then owner, Westfield, covering 20,000 sq ft of space which saw the installation of five separate attractions.

Paragon had previously been known for designing interiors and building displays for other operators but said it had ambitions to run its own attractions. It was thought the Quest idea was a pilot scheme which would be rolled out across the country.

However, the experiment appears to have failed and in an announcement to the London Stock Exchange today Paragon Entertainment said it would shut the facility next spring after incurring losses of £90,000.

It said the attractions equipment installed at Merry Hill had been written down to a realisable value of £118,000 which, in the Paragon Entertainment board’s opinion, reasonably represented fair value. It said it would not be taking any further impairment at this stage.

“We expect to incur losses at Merry Hill during the six month notice period of approximately £110,000 which the board is satisfied is less than the cost of immediate closure. Losses at Merry Hill at the EBITDA level for the year to October 31, 2014 amounted to £90, 000,” it said.

Mark Pyrah, CEO of Paragon Entertainment, said the trading position at Merry Hill had become unsustainable due to the low footfall within the Quest facility.

“The imminent major redevelopment at the centre, since it was taken over by Intu Properties in May this year, coincides with a break opportunity in our lease and, for commercial reasons, we have elected to exercise that break,” he said.

“Quest at Merry Hill has been a valuable test bed for the company and our future relationship with Intu Properties. The board is hugely grateful for the past and continued efforts of the Quest staff and management team, and the loyalty from over 200,000 happy visitors who continue to enjoy great family entertainment at Quest.”