At the end of January, the business warned that adjusted pre-tax profits for its full financial year were likely to be between £28 million and £30 million, down from current expectation of £35 million
UK ecommerce firm Studio Retail is hoping for a rapid sale of its assets, after the appointment of administrators from Teneo. The move came after the company issued a profit warning, and raised its prices.
Initially founded as a catalogue retailer, Studio Retail focuses on gifts but has expanded dramatically online and now also sells clothes, home and electrical products on flexible payment terms. It had around 2.5 million customers and made £578.6 million in sales during the last financial year.
The Lancashire based online trader also has a headcount of 1,400. These roles are reportedly now at risk, though, as the company has endured a torrid start to 2022.
In a statement at the end of January, the business warned that adjusted pre-tax profits for its full financial year were likely to be between £28 million and £30 million, down from the current market expectation of £35 million.
The update saw the group’s share price slump by more than 35%.
This was followed by a further statement in February, with the company announcing it had requested a short-term loan of £25 million from its lending banks, in order to fund surplus stockholding which it ‘believed was sufficient to enable it to sell through the stock to customers’.
This request was not met, and soon after, Studio Retail announced it had called in administrators. The group – of which Mike Ashley’s Frasers Group is the biggest shareholder – issued a statement that specialists from Teneo Financial Advisory would oversee the process.
The statement to the London Stock Exchange, where Studio Retail was listed, noted: Further to the company’s announcement, of its directors’ intention to appoint administrators, and subsequent board approval, the company announces the appointment of Daniel Francis Butters and Daniel James Mark Smith of Teneo Financial Advisory as joint administrators. The administrators are currently in advanced discussions in relation to an accelerated M&A process for the business and assets of the company.
