Studio Retail: What went wrong?

Mike Ashley-backed Studio Retail suspended shares on the London Stock Exchange this morning as it filed a notice to appoint administrators. Retail Gazette looks at the recent history of the online catalogue retailer to find out where it all went wrong.



2013: Findel, which Studio Retail was known as until 2020, sold its healthcare division to LDC for £24 million.

2015: Findel sold its Kleeneze business to CVSL for £3.4 million.

2016: Findel sold its online sports retailing business, Kitbag, to US provider of licensed sports apparel and merchandise, Fanatics Inc, for consideration of £13.9 million.

Sports Direct owner Mike Ashley expressed interest in Findel. He acquired an 18.9% share in the company.

2019: Mike Ashley’s Sports Direct increased their stake in Findel, which had rebranded as Studio Retail Group this year, to 30% and launched a takeover bid of the company. Findel shareholders rejected the takeover attempt, which it said “opportunistic” and “significantly undervalues” the business and its future prospects.

2020: In April, Studio withdrew a revolving credit facility (RCF) of £85 million and a securitisation facility of £200 million to ensure it had sufficient liquidity for its near-term requirements.

The facility was fully drawn on March 27 2020, resulting in net debt of £53 million or cash on balance sheet of £32 million.

Studio said the headroom was a £5 million improvement than it would otherwise have expected to see due to “a particularly cautious approach to cash outflows in the week following the lockdown announcement, which has since been reversed”.

In December, Studio revealed profits and sales had soared during the pandemic but it was undertaking a strategic review to explore sale options after receiving a letter from largest shareholder Frasers Group, formerly Sports Direct, which said the firm was “significantly undervalued”.

The board appointed Stifel as its financial advisor to conduct a formal sale process.

2021: Studio sold the Findel Education businesses to West Moorland 221 Limited, a firm set up by private equity firm Endless, for £30 million.

In January, Studio said it recorded a 32% rise in sales during the golden quarter.

In April, Studio said it failed to find a buyer for the business. “Despite engaging extensively with many of these parties, discussions did not progress beyond receiving qualified, indicative and non-binding expressions of interest for the company,” it said.

In June, Studio reported a rise in profits in a “transformational year”.

Pre-tax profits rose 513% to £41.7 million in the year to March 26, 2021 and sales jumped 33% to £578.6 million.

2022: Studio boosts senior leadership team by welcoming 35 members to its data team in early January.

On 31 January Studio warned that profits would be lower than market expectations amid “shipping issues”.

The group revealed that widespread supply chain challenges not only led to higher shipping costs, but also to late-arriving unsold stock, which will need to be sold throughout 2022.

Product sales in the eight weeks to 25 November were down 21% year on year but in the remaining five weeks of its third quarter they were up 9%.

Studio Group chief executive Paul Kendrick said: “The fundamentals of Studio’s business model are solid, notwithstanding the market challenges that have been exacerbated by our over-commitment to stock in the near term.”

The retailer said it is exploring a range of options to meet a working capital funding requirement, including discussing its current level of working capital facilities with its long-standing UK lenders.

On February 14, Studio called in administrators after failing to obtain a £25 million funding loan.


Studio’s problems were very much short-term rather than caused by long-lasting structural issues. In fact, the online retailer was one of the star-performers during the pandemic with both sales and profits soaring.

The supply chain crisis has hit many retailers over the past six months but Studio appears to be its first major victim. The surplus stockholding it had following shipping delays over the critical Christmas trading meant it needed additional working capital funding whilst it sold this through and unfortunately its lenders were not willing to give it the short-term £25 million loan requested.

However, with a fundamentally healthy underlying business this is probably not the end of line for Studio. It also remains unclear whether Mike Ashley’s Frasers Group will attempt to buy Studio from administration.

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  1. There doesn’t appear any valid reason for the company to go into administration.I genuinely believe that it will be bought before being liquidated.

  2. Something smells here. When does a bank pull the plug on a viable business unless maybe a clandestine deal has been made to them to take on the debt? Will watch this closely before writing to the Financial Conduct Authority.


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