Popbarz, the owner of gay clubs such as Ghetto and Popstarz in London, has gone into administration.
Its administrators Ideal Corporate Solutions told the London Evening Standard that it had suffered a “significant downturn in trade” .
Ghetto was forced to move from Soho to Old Street last year due to increasing rents.
It is still open while administrators search for a buyer, although a Brighton branch has closed.
Stephen Coote, director of the Gay Business Association, told the newspaper that the number of bars and pubs advertising themselves as gay in London had dropped to 150, from 250 five years ago.
He said: “People are spending less on entertainment, and that has hit businesses in Soho and Vauxhall hard.”
Coote added that gay bars and clubs were now having to advertise straight nights to survive.
“Thirty years ago, straight bars would open their doors to the gay community on Monday, the quietest night. Now it has gone full circle,” he said.
“I expect more of the community’s bars to open to the broader market.”