Studio Retail, the popular online retailer known for its affordable merchandise, has announced the appointment of administrators, marking the end of any hopes for a potential turnaround. The company, previously known as Findel, has sought the assistance of Teneo to manage its collapse, putting around 1,400 jobs at risk.

This decision was made after HSBC, the bank that Studio Retail is associated with, rejected their request for a £25 million working capital loan. Consequently, the company suspended its shares last week. Despite generating impressive figures of over £500 million in sales and £41.7 million in pre-tax profits last year, Studio Retail, with a market capitalization of £100 million, was unable to avoid this unfortunate collapse.

CEO Paul Kendrick expressed confidence in the company’s ability to achieve £1 billion in sales in the annual report. Nevertheless, the business released its second profit warning in February, citing reasons such as over-optimistic ordering, increasing shipping costs, and transportation delays, which resulted in an excess of inventory and financial strain for the company.

Interestingly, renowned investor Mike Ashley, CEO of Frasers Group, voiced his confusion over Studio Retail’s downfall. Ashley, who had previously attempted to acquire the company in 2019, currently holds the largest stake at 28.9%. Sources involved in the restructuring suggest that Ashley may now be considering purchasing certain parts of the business, signaling a potential lifeline for Studio Retail.

Links:

1. Studio Retail Official Website
2. Retail Gazette – Latest Retail News