The swift demise of Studio Retail, in which Mike Ashley had a 28.9% shareholding, confirms that even the online retail boom is not exempt from spiralling costs. 

Earlier this month, Studio Retail issued its second profit warning in two months following a slowdown in sales causing a shortfall in working capital. The appointment of administrators may come as a surprise for a company which made more than £500m in sales last year selling personalised gifts, clothing and household items, and was valued at £100m before shares were suspended. It is understood that the company was suffering from spiralling costs - citing increased transport costs, higher wages and over-ordering of stock as particular issues causing cashflow difficulties. 

With the company's revolving credit facility fully drawn, it requested an extra £25m in the form of a working capital loan from HSBC. When that request was refused, the company took the decision to appoint administrators. 

As the grip of inflation takes hold and squeezes household income, this could be the first of many casualties for retailers riding the wave of the online retail boom. For those retailers still struggling to recover from losses on the high street during the pandemic, on top of the sharp rise in costs, it will be interesting to see which businesses are left struggling to survive.