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Chronicle Live
National
Catherine Furze

Mike Ashley backed Studio calls in administrator and halts orders

Online retailer Studio Retail Group has called in administrators after failing to secure funding to keep it going.

The online retailer, which is part owned by former Newcastle United owner Mike Ashley, has around 2.5 million customers and employs around 1,000 people, mostly at its headquarters, call centre and warehouses in Accrington, Lancashire.

Studio made the move after it failed to secure a £25 million rescue loan last week and has suspended shares on the London Stock Exchange.

Go here for the very latest breaking news updates from across the North East

Ashley is Studio’s biggest backer, having amassed a 28.9pc stake through his Frasers Group since 2015.

The website, which sells clothing, homeware, electricals and toys, and allows customers to pay for their purchases monthly to spread the cost, has a warning that the company is not taking any new orders, and Studio is also warning of delays to outstanding customer 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, shoppers may have to apply to the administrator to get their money back.

In a statement, Studio - which had £579million of sales during the last financial year - said it would appoint administrators "as soon as reasonably practicable".

It 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 problems.

So how will this affect you, the customer?

What does it mean when a company goes into administration?

It doesn't necessarily mean the end of the business.

It means an insolvency firm has been called in to run the company, and get what cash it can for creditors, by selling or utilising its assets. This process can last anywhere from a few weeks to a year or more.

In theory, a business can be kept running (or be sold) as a 'going concern', but this is unlikely in the long term.

What's the difference between administration and liquidation?

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.

The insolvency firm will collect any assets, try and sell what they can, and then distribute whatever cash remains to creditors, in order of priority.

What will happen to my order?

Although Studio are not taking any new orders, some orders already placed are still being processed and delivered.

  • If you have a studio account, you will receive a confirmation email once your order is dispatched. If your order isn't able to be sent, Studio will credit your account so you no longer owe that money to the firm.
  • If you pay in full at the checkout, you will receive a confirmation email once your order is dispatched. If it can't dispatch your order, it will get in touch with you separately - though Studio have not confirmed if refunds would be provided.
Studio Retail Ltd employs around 1,000 people in Lancashire (Accrington Observer)

What happens if I don't get my goods or a refund?

You may still be able to get your money back if you paid by credit or debit card.

I paid by credit card

If what you purchased cost more than £100 and you paid for any part of it by credit card, then you can get your money back from the card firm.

However, the £100 is for a single item. For example, if you ordered two £90 items - a total order of £180 -it won't count, but a single item costing £105 would.

Contact your credit card company to get the ball rolling.

I paid using my debit card

If you paid on a Visa or Mastercard debit card for any amount, or Visa, Mastercard or Amex credit card for goods under £100, you might be able to get your money back under the Chargeback system, where your bank gets cash back from the company's payment processing bank.

This isn't a legal protection, so there's guarantee you'll get you money back, and you must complain within 120 days of realising there's a problem.

To go down this route, contact your card's issuer.

Former Newcastle United owner Mike Ashley is a major shareholder in Studio Retail Ltd (PA)

I didn't pay by credit or debit card

Unfortunately, you don't have any protection when paying by cash, cheque or bank transfer.

If Studio does stop trading and you didn't pay for your goods on credit or debit card - or you're struggling to get your money back via these avenues, you may have to apply to the administrator to get your cash back.

Even then, there's no guarantee you'll see a penny as you'll likely be bottom of the list of people owed money by the firm.

If you do get a refund through the administrators, it's often just a few pence per pound owed.

Can I return goods I have received but don't want?

Studio says you can continue to return undamaged items you no longer want through its normal returns process, which can be found on its website.

Though do bear in mind that if the company goes into administration it may stop processing returns and refunds and your only option would then be to register as a creditor with no guarantee of getting your money back.

I have a faulty item to return

You should contact Studio's customer services team, either via its contact form on its website or by calling 0371 200 0378.

My monthly payment is due - do I have to pay it?

For the time being, Studio has confirmed that shoppers who owe money on their Studio Pay account should continue to make repayments as planned to avoid a late payment fee of £12.

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