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Studio Retail falls into administration following loan rejection

By Rachel Douglass

24 Feb 2022

Business

Image: Mike Ashley, courtesy of Chris J Ratcliffe/AFP

Mike Ashley-backed Studio Retail has reportedly appointed administrators after its request for a short-term loan was declined by its bank.

The online retailer is said to have teamed up with Teneo to handle the matter, according to a report by The Times.

The publisher also noted that about 1,400 jobs, mostly based at its headquarters in Accrington, Lancashire, have been put at risk due to the retailer’s collapse.

Around 1,400 jobs at risk

Earlier this year, Studio, previously known as Findel, issued its second profit warning and reported a notice of intent to appoint administrators, citing a surplus in stock holding that required additional working capital funding.

Following the dismissal of its request for a short-term 25 million pound working capital loan, the company suspended its shares on the London Stock Exchange, a move that reportedly shocked investors.

A previous report by The Times had speculated that Mike Ashley’s Frasers Group, the company’s biggest shareholder, was possibly contemplating a rescue deal for Studio Retail. Ashley, who holds a share of 30 percent, previously tried to acquire the retailer back in 2019, however, opted to sell a part of his shares instead.