One of the UK’s largest night club operators, Luminar Leisure, has sold 26 sites to Cavendish Bars at 19p each – the latest sign that the smoking ban is having a grave effect on the late-night leisure market.

The company will also pay a reverse premium of £800,000 to Cavendish for taking on the loss-making lease-hold properties and will also fund all costs relating to the sites before the deal is completed.

In total, Luminar expects to make a near £10m loss on the deal.

The 26 sites were earmarked for a cull by Luminar after they generated pre-tax losses of £1.8m last year.

According to chief executive Stephen Thomas, the deal is part of the group’s efforts to rationalise operations.

“The disposal completes the strategy of streamlining the group’s activities. It releases the group from liability for those units going forward and from the cost of having them on our books,” he said.

Thomas also said the deal would allow the company to concentrate on its remaining 90 sites and its pipeline of 18 new openings.

Last month, shares in the company fell 7.7 per cent after it announced it was scaling back its expansion plans.

The company is now aiming to have a portfolio of 110 units by 2010, of which over 70 will be branded. Back in October, the group had planned to own 120 nightclubs in the course of 2009, of which it expected some 80 to be branded.

Luminar’s nightclub brands include Oceana, Liquid and Lava & Ignite.