1,400 jobs are now said to be at risk after Studio Retail finally appointed administrators once its attempts to secure a bank loan had failed.
According to a report in The Times this morning, Studio has reportedly appointed administrators after its bank rejected its request for a loan. The move puts around 1400 jobs at risk. The report suggests that administrators from Teneo have been appointed to handle the process.
Last week, the online retailer had warned that it would seek administration if it was unable to secure funds to cover excess stockholding, which the retailer claimed had arisen due to the late arrival of shipments in Q4. The group said it was in need of additional working capital funding while the excess inventory was sold through.
The company subsequently suspended its shares after admitting its request for a short-term £25 million working capital loan had been turned down by its bank HSBC.
The company had already warned of lower than expected profits and price increases caused by higher shipping costs and delayed stock, despite improving its performance on Black Friday and throughout the Christmas period.
Mike Ashley’s Frasers Group is Studio’s largest shareholder, currently holding a 28.9% stake.
The retailer had about 2.3m customers and a market capitalisation of £100m. Sales topped half a billion last year, delivering a £41.7m pre-tax profit.