Studio Retail formally appoints administrators
Any hopes that Studio Retail might turn around its fortunes have been dashed as it has formally called in administrators. The online retailer, which sells a wide variety of keenly-priced general merchandise, including fashion, beauty, and personalised gifts, appointed Teneo to handle its collapse. Around 1,400 jobs are now at risk.
The company, formerly known as Findel, was forced to suspend its shares last week after a request for a short-term £25 million working capital loan had been turned down by its bank, HSBC.
The collapse of Studio Retail, which had a market capitalisation of £100 million, comes despite it making more than $500 million in sales and £41.7 million pre-tax profits last year.
As its trajectory looked to be a good one, Chief executive Paul Kendrick had said its target for £1 billion in sales was “eminently achievable” in last year’s annual report, despite cost pressures.
However, the business issued its second profit warning in two months at the start of February on the back of over-optimistic ordering, rising shipping costs and transport delays, which led to it being stuck with a higher level of inventory than normal.
Major investor Mike Ashley – the boss of Frasers Group – had been left mystified as to why and how its demise happened. Ashley, who had tried to acquire Studio Retail in 2019, is the biggest shareholder in the company with a 28.9% stake and only increased its holding a few weeks ago.
Restructuring sources said Ashley could now look to buy parts of the business.
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