STUDIO Retail Group is to hire administrators after failing to secure an urgent £25 million loan, potentially leaving thousands of customers out of pocket.
Up to 1,000 jobs are at risk at the Lancashire-based online retail company, which was known as Findel until 2019.
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It has now had its shares suspended on the London Stock Exchange as a result.
The business, whose largest shareholder is Mike Ashley‘s Frasers Group, issued a second profit warning in two months in January after being hit by transport delays and higher shipping costs.
Studio had asked banks for a short-term loan which it said would have been “sufficient” to tide it over while it sold surplus stock.
Studio has around 2.5 million customers and made £579million in sales during the last financial year.
It has not yet been disclosed how many customers have outstanding orders with the company, but it could be thousands.
Studio Retail Group said: “Following detailed discussions with our UK lenders, the company has not been able to reach agreement with them to provide the additional funding Studio requires.
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“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.”
What if I’ve ordered something but haven’t received it yet?
It is unclear at the moment whether customers who have an outstanding order will get their products, or will receive a refund.
Studio’s website is still up and running, but it’s not taking any new orders.
It could take up to 10 days for administrators to be appointed, and it is likely we will know more about what customers can expect then.
What are my rights?
If the company continues trading in administration, you might receive your order or continue to be able to return goods.
If it stops trading though, you may have to apply to the administrator to get your cash back – and even then there’s no guarantee you’ll see any money as you’ll be bottom of a long list of people with claims against the business.
What if I paid on a credit card?
If you spend more than £100 using a credit card, you are protected by Section 75 of the Consumer Credit Act if a company goes bust.
This is not the case if your purchase was under £100.
However, to claim under Section 75 you don’t have to have paid more than £100 or the full amount on your credit card – the card company is liable even if you made only part of the payment on your card.
It’s the value of the goods you’re buying that is key – not the amount paid on the card.
Unfortunately, debit card purchases are not covered in the same way. The cash can be reclaimed using a method called chargeback, but involves the card issuer requesting the refund from administrators.
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