RE: Mike Ashley16 Feb 2022 14:21
I’m not sure it is very fair to compare studio to Debenhams, one is still forecasting to make near their record profits for the year and the other was a department store plagued with high lease costs as customers were moving away from physical stores.
I think people are jumping the gun here, the rns states they are intending to appoint administrators, but it is a few days on now and still no confirmation that they have actually entered into administration which should tell you that something is going on in the background.
I suspect there will be a resolution on this tomorrow, or if not by Friday at the latest. If a company is making £30m a year and realistically can be picked up for £100m or less even with short term cash flow issues there will be buyers rubbing their hands together and queueing up. All parties involved will be trying to avoid administration in this case.
This will either be sold as a going concern, or there will be some form of equity financing deal agreed. I don’t think it will even reach administration.
People see the term administration and think of high profile cases like Debenhams and think that means it is the end, but that’s not necessarily the case especially when a company is profit making and still has substantial net assets excluding intangibles.
I’ve no position here although I did consider it at times, If you are a shareholder you will no doubt end up having to take a hit, but if you are an employee worried about your pay check I wouldn’t be too concerned personally.