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Daily Mirror
Daily Mirror
Business
Levi Winchester

Online store Studio Retail to hire administrators placing thousands of orders at risk

Online retail giant Studio is to call in administrators after failing to secure a £25million rescue loan.

Studio Retail Group, which is a third owned by Sports Direct boss Mike Ashley, has filed a notice of intention to appoint administrators and has suspended shares on the London Stock Exchange.

Up to 1,000 jobs could be at risk at the online retail company, and Studio is warning of delays to outstanding customer orders.

Studio - which sells goods including clothing, homeware, electricals and toys - has around 2.5million customers and made £579million in sales during the last financial year.

It isn't clear how many outstanding orders it has still to fulfil, but it could be in the thousands.

Mike Ashley owns a third of Studio (PA)

Studio hasn't said if customers will receive their orders or if they'll be refunded, or if they can return items - but its website currently isn't taking any new orders.

A notice reads: "Sorry, we're not taking any orders at the moment. We'll provide updates as soon as we can."

If the company does stop trading, you may have to apply to the administrator to get your money back.

You may also be able to use other methods of reclaiming your cash, such as using Section 75 of the Consumer Credit Act or the Chargeback scheme.

Section 75 can be used for credit card spends that have gone wrong, for purchases worth between £100 and £30,000.

This is because the Consumer Credit Act dictates that your card provider is jointly liable, as well as the company you purchased from.

Are you worried about a purchase from Studio? Let us know: mirror.money.saving@mirror.co.uk

Debit card payments, cheques and transfers not covered by the Consumer Credit Act might qualify for the Chargeback scheme instead - but sadly this isn’t enshrined in law.

In a statement, Studio said it wants to appoint administrators "as soon as reasonably practicable".

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.

"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."

Studio had been seeking a rescue loan after it issued a second profit warning in two months in January, blaming transport delays and higher shipping costs for its struggles.

What does it mean when a company goes into administration?

When a company goes into administration, it doesn't necessarily mean the end of the business.

As part of the process, an appointed licensed insolvency practitioner will be put in charge of managing the firm.

It will be their job to try to help find ways to repay debts, solve its cashflow problems or find a new owner.

This can last anywhere from a few weeks to up to a year or more - so it can be a lengthy ordeal.

But if the administration process can't rescue the company or find a new owner, this usually leads to liquidation.

Liquidation is the process of selling all assets and then dissolving the company completely.

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