Studio Retail Group to call in administrators – union is seeking urgent meeting with bosses
Around 1,000 jobs are at risk after struggling online retailer Studio Retail Group said it was calling in administrators after failing to land a £25m lifeline.
Studio Retail Group, which counts Mike Ashley’s Frasers Group as its biggest investor, reported in January that it has a surplus stockholding which requires additional working capital funding while it is sold through to customers.
The Accrington, Lancashire-based company requested a short-term loan of £25m from its lending banks to fund the surplus stockholding, which it believed was “sufficient” to enable it to sell through the stock to customers.
Following discussions with its UK lenders, the business has not been able to reach agreement with them to provide the additional funding Studio Retail Group requires.
In a statement the group said: “The Board therefore 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.
“The Board is taking this action to protect the interests of its creditors.”
Usdaw, the trade union for Studio Retail staff is now seeking urgent meetings with management.
Julia Baldwin, Usdaw Area Organiser said: “This is obviously very worrying news for our members and we are seeking urgent meetings with managers and administrators.
“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 group, formerly known as Findel, said supply chain issues have led to higher shipping costs and late-arriving unsold stock of continuity ranges, which has meant higher levels of inventory than normal at this point in the year.
Two weeks ago the group saw its shares plunge by nearly 40% following a profit warning after it slashed its outlook.
In its half-year results published in November, the group dropped its adjusted pre-tax profit outlook from between £42m and £45m to between £35m to £40m.
Shares in the group have been temporarily suspended by the FCA.
