In the region of 1,400 jobs are at risk after Studio Retail Group formally entered administration, it has been confirmed.
The Lancashire-headquartered online trader has appointed Teneo to lead the process.
The move comes after the group, whose largest shareholder is Mike Ashley's Frasers Group, issued a statement on Monday, February 14, that it was set to call in the administrators.
READ MORE: Click here to sign up to the BusinessLive North West newsletter
The listed company made the move after warning its profits are set to be lower than market expectations and is to raise its prices.
In a new statement issued to the London Stock Exchange, Studio Retail Group said: "Further to the company's announcement on 14 February 2022 of its directors' intention to appoint administrators, and subsequent board approval, the company announces the appointment of Daniel Francis Butters and Daniel James Mark Smith of Teneo Financial Advisory Limited as joint administrators.
"The administrators are currently in advanced discussions in relation to an accelerated M&A process for the business and assets of the company, including in relation to the company's main operating company, Studio Retail Limited.
"For the avoidance of doubt, Studio Retail Limited is not in administration. A further update will be provided in due course.
"At the request of the company and in accordance with the company's announcement on 14 February 2022, with effect from 7.30a.m. on 14 February 2022 the Financial Conduct Authority temporarily suspended the listing of the company's ordinary shares on the premium segment of the Official List and the London Stock Exchange suspended the trading of the company's ordinary shares on the main market for listed securities maintained by the London Stock Exchange.
"In light of the administration, the administrators have applied for the cancellation of the listing of the company's shares on the premium segment of the Official List and cancellation of the trading of the company's shares on the main market for listed securities maintained by the London Stock Exchange, which are both expected to take place at 8:00am on 25 February 2022."
In a statement at the end of January, the business said its adjusted pre-tax profits for its full financial year are not likely to be between £28m and £30m, down from the current market expectation of £35m.
Following that update the group's share price slumped by more than 35%.
In the statement issued last week, the company said it had requested a short-term loan of £25m from its lending banks to fund surplus stockholding which it "believed was sufficient to enable it to sell through the stock to customers".
It added: "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.
"The board is taking this action to protect the interests of its creditors.
"Following consultation with the FCA, the company has requested that the listing of the company's ordinary shares of 10 pence each be temporarily suspended with effect from 7.30 a.m. on 14 February 2022.
"Further announcements will be made as appropriate."
At the end of January, the group said demand in the early weeks of January has been "relatively subdued, with some margin erosion as we cleared some seasonal stock that could not be carried forward".
It said that this had been partially mitigated through the bad debt performance, which was better than expected particularly due to improvements in the recovery rates achieved on defaulted debts.
The company started life as a catalogue retailer focused on gifts but has expanded dramatically online and now also sells clothes, home and electrical products on flexible payment terms.
It has around 2.5 million customers and made £578.6m in sales during the last financial year.
