JOBS could be at risk as a large East Lancashire company looks to appoint administrators.

It is estimated that more than 1,000 people could be out of work as bosses at Studio Retail Group, based in Church, confirmed they would be filing a notice of intention to appoint administrators.

Described as one of the largest online retailers in the UK, Studio offers a range of products from clothing and footwear to homeware and Christmas ranges, available though various payment options on their digital platforms.

Lancashire Telegraph:

The company, which counts Mike Ashley’s Frasers Group as its biggest investor, is to hire administrators after failing to secure an urgent £25 million loan.

Formerly named Express Gifts, it operates its head office from Henry Street in Church, though also has offices and warehouses in Burnley, Clayton-le-Moors, Middleton and Failsworth.

Local leaders have described the announcement as ‘worrying news’ urging that all is done to find a new investor to protect the jobs.

A statement from the company reads: “As announced on January 31, Studio has a surplus stockholding which requires additional working capital funding whilst this good quality stock is sold through to customers. 

“The Company requested a short-term loan of £25m from its lending banks to fund the surplus stockholding which it believed was sufficient to enable it to sell through the stock to customers.

“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.”

Lancashire Labour Leader, Azhar Ali said: "At a time of economic concern for families this is worrying news. Every effort has to made to find a new investor that will protect jobs in Hyndburn. I'll be speaking with north west trade unions to keep updated on efforts to support the workforce and the business."

Council leader Miles Parkinson added: “This is a major concern. The company has highlighted its short-term problems of liquidity and the council and other organisations are keen to support the board though whatever they can to allow the lenders to change their mind. Studio is a crucial employer in Hyndburn.

“Through the council and the MPs in the area will be talking to the board and lenders in due course to see what they can do.”

Last month, the company saw its shares plunge when it issued its second profit warning in two months after being hammered by transport delays and soaring shipping costs.

The home shopping business said its cash was being heavily cut into as a result of the distorted levels of stock following the disruption.

Studio said it is now taking action to protect the interests of its creditors.

It has around 2.5 million customers and made £578.6 million in sales during the last financial year.

The group’s biggest shareholder is retail veteran Mr Ashley’s Frasers Group, which holds a stake of around 29 per cent.

The tycoon attempted a takeover of the business in 2019 but saw his 161p-per-share offer rebuffed.

Studio’s shares were trading at 115p before they were suspended.

Hyndburn MP Sara Britcliffe said that her 'whole focus' is on the situation. She said: “I have been in constant dialogue with the CEO of Studio Retail throughout the day and have reached out to local and national trade union representatives to see what support we can provide to help protect the staff who will be understandably very concerned. My priority is protecting their jobs and keeping this employer in our community.

“I have immediately reached out to the Chancellor, the Secretary of State for BEIS and the Secretary of State for the DWP. I am pleased that all departments are responding, and I am discussing what support may be available to help resolve this situation."

Former MP Graham Jones added: “Shocking news for Hyndburn. Let's hope an investor can be found that retains local employment. Some 1,000 jobs depend on Studio.

“Important that everyone pulls together. I have written early this morning to the GMB & USDAW trade unions who have strong representation on site for an update.”

Usdaw is the trade union for Studio Retail staff and said it is seeking urgent meetings with management and the administrators. Usdaw Area Organiser, Julia Baldwin said: “This is obviously very worrying news for our members and we are seeking urgent meetings with managers and administrators. "Our priority is to secure jobs and we are providing our members with the support, advice and representation they need at this difficult time.”