Studio Retail Group calls in administrators after £25 million funding bid fails to materialise
Studio Retail Group, which counts Mike Ashley’s Frasers Group as its biggest investor, is to hire administrators after failing to secure an urgent £25 million loan.
The online retail business, which was known as Findel until 2019, has now had its shares suspended on the London Stock Exchange as a result.
Last month, the Accrington-based company saw its shares plunge when it issued its second profit warning in two months after being hammered by transport delays and soaring shipping costs. The home shopping business said its cash was being heavily cut into as a result of the distorted levels of stock following the disruption.
It confirmed on Monday that it has surplus stock and has required extra money for working capital while it is sold to customers. Studio asked its banks for a short-term loan of £25 million, which it believed would be “sufficient” to help it sell this stock.
“Following detailed discussions with our UK lenders, the company has not been able to reach agreement with them to provide the additional funding Studio requires,” it said.
“The board therefore now intends to file a notice of intention to appoint administrators to SRG and Studio Retail Limited, its wholly owned subsidiary, as soon as reasonably practicable.”
Studio said it is now taking action to protect the interests of its creditors.
The company started life as a catalogue retailer focused on gifts but has expanded dramatically online and now also sells clothes, home and electrical products on flexible payment terms. It has around 2.5 million customers and made £578.6 million in sales during the last financial year.
The group’s biggest shareholder is retail veteran Mr Ashley’s Frasers Group, which holds a stake of around 29%.
The tycoon attempted a takeover of the business in 2019 but saw his 161p-per-share offer rebuffed.
Studio’s shares were trading at 115p before they were suspended.