Mike Ashley’s Frasers Group said it had bought digital retailer, Studio Retail out of administration, saving the troubled firm and 1,500 jobs.
Frasers, the company’s largest shareholder, said the deal included an undisclosed cash sum and a £26.8m payment to Studio Retail’s lenders.
It also agreed to act as guarantor over “certain payments” relating to the SRG group pension scheme.
“As Frasers Group seeks to elevate its customer journey including a flexible repayment proposition, the acquisition of SRL will provide Frasers Group with expertise and synergies that will accelerate this ambition,” the company said on Friday.
“Frasers Group is also pleased to have rescued another business out of administration and saved approximately 1,500 jobs.”
Studio Retail filed for administration earlier this month after failing to secure a new working capital loan.
The company also suspended its shares on the London Stock Exchange. It’s stock tumbled in February after its second profit warning in two months on the back of higher shipping costs and transport delays.
As a result of distorted stock levels, working capital was being eroded, it added. Studio asked for a short-term £25m loan to fund the surplus stock but failed to reach agreement with lenders.
Studio Retail sells clothes, shoes and home and electrical products on flexible payment terms. It has about 2.5 million customers and made sales of £578.6m and profits of £41.7m last year.
Frasers Group owns a 28.9% percent stake. Ashley attempted a takeover of the business in 2019.
