Studio Retail announces intention to appoint administrators

British firm Studio Retail has announced its intention to appoint administrators after it failed to receive a short-term loan of 25 million pounds from its lending banks.

It closely follows a report from the firm two weeks ago stating that it had taken a hit from logistics issues throughout Christmas, issuing what was its second profit warning.

Now, the home shopping company, which sells a range of general merchandise, has said it “has a surplus stockholding which requires additional working capital funding whilst this good quality stock is sold through to customers”.

Following the request for the short term loan, which it “believed was sufficient to enable it to sell through the stock to customers”, the company said it “has not been able to reach agreement”.

It has now stated its intention to appoint administrators to SRG and Studio Retail Limited as soon as possible and put a hold on its ordinary shares.

It is unclear what is next for Studio Retail which, just last year, published several positive trading reports, possibly resulting in the stock surplus after the slowing down of online purchases.

Another failed investment for Mike Ashley?

Only two weeks ago, the company’s biggest shareholder, Mike Ashley’s Fraser Group, increased its holding by 1.75 percent to 30, following a decline in share price after Studio Retail’s profit warning.

While Ashley has not officially commented on the news, The Times shared a quote from a source close to him stating: “He’s not happy. He doesn’t understand how they f***ed it up.”

Despite the report, it seems there is speculation that Ashley could be looking into a rescue deal for Studio Retail, or to possibly provide financing to keep it afloat. The retail mogul previously tried to acquire Studio Retail back in 2019, later selling a portion of his shares to bring his hold to 27 percent.

It isn’t the first time one of Ashley’s investments has gone awry. In 2020, he lost 150 million pounds when Debenhams went into administration. He also lost out on a significant investment in Goals Soccer Centres following an accounting scandal that saw the company go up for sale in 2019.