Studio debts reported to be more extensive than first thought

Published on: 17th March 2022

Studio was sold to Frasers Group for just £1 and owing more than £80m at its collapse, with Frasers Group taking on secured lenders’ claims against the company for around £26.8m.

According to a report in Retail Gazette, the administrator, Teneo, has submitted new documents to Companies House which show the total consideration for the group when acquired by Frasers Group was £1 as well as the release of £53.1m of secured liabilities under its revolving credit facility and ancillary facilities.

Frasers Group bought Studio’s secured lenders’ claims against it for around £26.8m. Studio also owed around £4.7m to HMRC.

Teneo said it is waiting for a directors’ statement regarding how much is owed to unsecured creditors and added that there may be funds available to distribute to them.

The document also revealed that the firm experienced “considerable supply chain disruption” in the six months leading up to Christmas 2021, which delayed the arrival of stock into the UK. This then resulted in an inability to meet customer demand and the loss of sales during the peak, pre-Christmas trading period.

Studio had asked HSBC to extend its funding facility in January, but the request was denied. Suppliers began to put Studio on stop at this time and credit insurers suggested its cover would be affected.

The sale to Frasers Group is expected to protect more than 1,500 jobs that were put at risk when Studio appointed administrators. It is also 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.


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