Ex-Newcastle United owner Mike Ashley bought his latest acquisition, Studio Retail Group, for just £1, it has been revealed.
The online giant went into administration with an £80 million black hole last month, after failing to secure a £25 million loan. And documents submitted to Companies House by administrators Teneo show how it fell into financial trouble in the months before entering administration on February 15.
Around 1,500 jobs were saved when the website was acquired by Ashley 's Frasers Group - whose brands include House of Fraser, Sports Direct and Jack Wills. Frasers Group already owned a third of Studio when he bought it for £1, as well as taking on £53.1 million of secured liabilities and acquiring Studio Retail Group's secured lenders' claims against it for £26.8million.
Read More: What you should do if you are a Studio customer
Teneo revealed that Studio owed £50million for a revolving credit facility plus £3.1 million when it entered administration, as well as owing £1,100 to employees for holiday pay and pension contributions and a further £4.7 million to HMRC.
Studio Retail Limited, formerly Express Gifts Ltd, is the the largest company within Studio Retail Group, and sells greeting cards, gifts, home and garden items through its Studio and Ace catalogues and websites, offering its customers easy-payment terms.
The document filed with Companies House by Teneo said: "Studio Retail Limited (SRL) experienced considerable supply chain disruption during the six months to December 2021, which delayed the receipt of stock into the UK resulting in an inability to meet customer demand and the loss of sales throughout the group's peak, pre-Christmas trading period.
"Whilst stock was primarily sourced from Asia and committed on long lead times, SRL was unable to cancel late arriving stock which resulted in a sizable stock 'overhand."
The Teneo document said that the group did not have sufficient funds to pay the outstanding amounts due to suppliers or meet wage costs beyond the end of February when it collapsed.
