Studio Retail Group preparing to call in administrators in blow for largest shareholder Mike Ashley’s Fraser Group
Online value retailer Studio Retail Group, whose largest shareholder is Mike Ashley’s Frasers Group, is posed to call in administrators.
The Accrington-based firm said it had not been able to reach agreement with its UK lenders for additional funding it needed.
Studio Retail had requested a short-term loan of £25m to fund surplus stockholding which it said it thought “was sufficient to enable it to sell through the stock to customers.”
The board now intends to file a notice of intention to appoint administrators to SRG and Studio Retail Limited, its wholly owned subsidiary, “as soon as reasonably practicable.”
In a trading update last month, Studio Retail said its adjusted pre-tax profits for the full financial year were expected to be well below previous market expectations of £35m.
Shares took a hit to the tune of more than 35 per cent, following the January update.
The Union of Shop, Distributive and Allied Workers (Usdaw) said it was seeking urgent meetings with management after the announcement.
Usdaw area organiser, Julia Baldwin, said “This is obviously very worrying news for our members. Our priority is to secure jobs and we are providing our members with the support, advice and representation they need at this difficult time.”
The Frasers Group holds a stake of around 29 per cent in the firm, which started as an catalogue gift retailer and has expanded to reach 2.5m customers.
The firm’s shares have now been suspended on the London Stock Exchange.