Mike Ashley’s Frasers Group has bought online retail business Studio Retail out of administration, saving 1,500 jobs, it said.

The company behind Sports Direct and Evans Cycles bought the firm for £26.8 million after it went bust earlier this month and saw its shares suspended from the stock market.

Mike Ashley-backed Studio Retail Group to file for administration

Studio Retail, formerly known as Findel until 2019, struggled during the pandemic due to transport delays and soaring shipping costs.

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Frasers Group was previously its biggest investor and said the deal would see Studio Retail removed from its liabilities with lenders in return for the £26.8 million cash.

In a statement, Frasers added: “The company has also agreed to act as guarantor in respect of certain payments in respect of the SRG (Studio Retail Group) pension scheme to the satisfaction of the trustees.”

The retailer said the deal would provide Frasers with expertise that would allow it to continue its elevation to a more luxurious brand, having for years been seen as downcast and underinvested.

Last month, the Accrington-based Studio Retail saw its shares plunge when it issued its second profit warning in two months.

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

It said extra money was needed as it has surplus stock that it was unable to sell due to funding issues.

A short-term loan for £25 million from its banks was rejected, pushing it into administration.

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 £578.6 million in sales during the last financial year.

Frasers had a 29% stake prior to its administration and made an attempted takeover in 2019, although this was turned down.