Exeter’s Bike Shed Theatre is to close after eight years, citing funding issues.
Management of the theatre said its bar, which is run as a separate business, was no longer able to pay profits over to the theatre.
Although the 60-seat venue receives funding from Arts Council England and Exeter City Council, the theatre said the bar’s contribution from rent was “significant”.
It said continuing to operate would mean it would need to “compromise what we do”. It will close at the end of March.
The Bike Shed opened in February 2010, with two cellars transformed into a bar and theatre. As a theatre, the venue has won awards including a Peter Brook Empty Space Award and the UK’s most welcoming theatre prize at the UK Theatre Awards in 2013.
However, since it opened, a number of bars have opened around the theatre, making it harder to compete financially.
Co-founder David Lockwood said: “We’re incredibly proud of what we’ve been able to achieve and we continue to believe in a quality of experience. We don’t want to lessen our offer or sell out to a national chain. And so, with a very heavy heart and after a lot of attempts to keep going, we’ve decided to close up.”
He added that he hoped the closure would allow others to “create their own things, better things, wonderful things” in the space.
The company said it was continuing with plans to transform a derelict warehouse on Exeter’s quay into a space for music theatre, called the Boat Shed.
However, the theatre said this was “very much in the air”.
“In some ways, closing the Bike Shed could make things more difficult but we’ll be picking up conversations with stakeholders over the coming months to find a way to realise this project, assuming it’s still something that the city wants, of course,” the venue said on its website.