It is hoped that the acquisition will protect more than 1,500 jobs that were put at risk when the retailer appointed administrators earlier this week.

Mike Ashley’s Frasers Group has reportedly signed a £26.8m deal to buy online retailer Studio. The retailer initially appointed administrator Teneo on Thursday to handle the process, following weeks of speculation about its fate. It is hoped that the acquisition will protect the 1500 jobs that were thought to be at risk. Frasers Group was Studio’s largest shareholder, holding a 28.9% stake.

According to reports, the deal involves the release of the company from its liabilities to its secured creditors under its revolving credit facilities and ancillary facilities. The administrator Teneo stated the transaction was in the best interests of the company’s creditors as a whole: Studio had temporarily ceased taking orders and the deal will allow trading operations to resume, ensuring continuity for suppliers, the group’s employees, pension holders and customers.

Frasers Group also agreed to act as guarantor in respect of certain payments involving the Studio group pension scheme to the satisfaction of the Trustees, although the company will be released from all liabilities under Section 75 and 75A of the Pensions Act 1995 in respect of three of the four sections of the group’s pension fund. The Trustees of the Pension Fund are said to be supportive of these arrangements.

It is widely believed that the deal will enable Frasers Group to offer credit services to online customers of the operation’s existing retail brands, which include Flannels and Sports Direct. Studio Pay is already approved by the Financial Conduct Authority, which could allow Frasers to start offering credit to its customers almost immediately.