Studio Retail was sold to retail tycoon Mike Ashley for just £1, after it entered administration with an £80million black hole last month.
The online giant entered the hands of administrators on February 15 after failing to secure a £25million loan.
Now, documents submitted to Companies House by administrators Teneo have revealed for the first time how it fell into financial trouble in the months before entering administration.
Approximately 1,500 jobs were saved when the website was acquired by Frasers Group - whose brands include House of Fraser, Sports Direct and Jack Wills. It was already a third owned by the retail boss.
The total consideration for the group was £1 as well as taking on £53.1million of secured liabilities.
Frasers Group then acquired Studio Retail Group's secured lenders' claims against it for £26.8million.
Teneo has also revealed the group owed £50million for a revolving credit facility plus £3.1million when it entered administration.
It also owed £1,100 to employees for holiday pay and pension contributions and a further £4.7million to HMRC.
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'.
"This, combined with a reduction in Q4 sales, seasonal reduction in availability under the [£275m] securitisation facility [from HSBC] and the current level of overdue creditors, resulted in a significant funding shortfall."
Studio Retail Group approached HSBC in January for a loan but the lender rejected it.
The Teneo document added: "SRL also experienced further repercussions from the market update including a number of suppliers putting SRL on stop and indications from credit insurers that there may be a future reduction in cover/terms to future supply invoices.
"SRG's board sought to raise the additional funding to meet this requirement from its existing lenders, however this was unsuccessful. Accordingly, the group faced an immediate cash shortfall.
"The group did not have sufficient funds to pay the outstanding amounts due to suppliers.
"In addition, the group did not have sufficient cash to meet wage costs beyond the end of February 2022."
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.
