Online value retailer Studio has announced plans to explore its sale options as profits and sales soared during the coronavirus pandemic.

Studio recorded a 52% rise in adjusted profit before tax to £18m in the 26 weeks to September 25 as more customers shifted to online shopping.

Revenues grew 17% to £268m during the same period, reflecting an increase in demand and the growth of Studio’s active customer base by 15% to 2.1 million.

In the third quarter to date, Studio also reported “materially stronger profit performance” as November saw a quieter promotional market than the same period last year, with revenues up 32% year on year.

The value retailer, which switched from a catalogue business to a digital pureplay in 2018, is now undertaking a strategic review to explore sale options after receiving a letter from shareholder Frasers Group in October.

Frasers Group, which owns a 37% stake in the business told Studio it thought the group was “misunderstood by the market and as a consequence significantly undervalued” and “although this may be fixable over the long term, the group should conduct a strategic review”.

The board has subsequently appointed Stifel as its sole financial advisor to conduct a formal sale process.

No interested parties have been announced so far.

Group chief executive Phil Maudsley said: “I am very proud of the way that this group has responded over the last few months to the challenges of Covid-19.  

“These interim results are testament to the strengths of our digitally focused value business and the ability of our colleagues and customers to adapt rapidly to change.

“Our strategy to grow the Studio customer base and increase our customers’ spend with us, supported by our flexible credit offer has delivered a record trading performance which underpins our confidence in the group’s medium-term growth prospects.”