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Exclusive: Republic mulls closures as label rejig disappoints

Chain accused of ‘losing sight’ of core customer as move towards more premium product fails to reignite sales.

Young fashion chain Republic is understood to be looking to offload as much as 40% of its store portfolio after its plan to introduce higher-end brands failed to take off.

Sources told Drapers the retailer was considering the closure of 50 of its 120 stores to reduce costs from loss-making locations.

Earlier this month it was reported that Republic was looking to switch to monthly rent payments to help control its cash flow. The chain is understood to be in talks with landlords and has halted its store expansion plans.

Insiders indicated that as part of rent negotiations loss-making stores will be put under review.

Industry insiders said Republic had found the move towards premium products tough in the current economic climate. One brand’s manager said womenswear had performed particularly badly, and was “a noose around the neck” for the retailer.

He added: “[Republic] has got so much product and it looks too dense - it’s difficult to sell premium product when it’s crammed in like that. It’s difficult to sell brands such as G-Star and Diesel against own brand.”

Another industry insider said: “Sales just aren’t holding up and they’re finding it really tough.”

One supplier told Drapers that the problems stemmed from the chain “losing sight” of who its customer was.

“When [chief executive Paul Sweetenham] came in, Republic made a big fanfare about bringing in lots more higher-priced brands but that hasn’t worked for it. Its core customer is in the 12 to 18 age bracket and can’t afford to be shelling out on big-name brands.”

Sweetenham joined Republic from off-price retailer TK Maxx in March last year. On joining the business he vowed to push forward its expansion plans and at the time of his appointment told Drapers he was hoping to introduce a “healthier brand mix”.

Following years of solid results, trading deteriorated at the retailer in the year to January 29, 2012. Sales declined by 2.3% to £177m and operating margin reduced to 2.1% (against 15% in the previous year).

Pre-tax profit fell from £27.3m in the previous year to £3.2m. Sources told Drapers that profits are expected to
have diminished further for its next financial year.

A spokesman for Republic said: “There are no imminent plans to close stores.”

Readers' comments (9)

  • Republic has had problems for years, I guess they are trying to find a way forward.

    Hope they do.......

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  • Not a huge surprise, good luck to them but it may help if they had buyers/heads of buying who new what they were doing and above all who their core customer was...

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  • Duh, didnt see this coming!!! The transition from a barrow boy market stall to a blue chip, is a difficult one but Sweetenham was a very surprising appointment. I think his ego got the better of him and he thought he was Midas. Republic is about cheap brands for, predominantly teenage boys. Their strategy should be to buy up distressed brands like Gio Goi and bang them out cheap until they are bastardised, carry on presenting their own brands as brands and gain credability from a couple of proper brands like G Star. Simples!

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  • Unfortunately, Republic has had a policy of promoting staff from within for years, which was a strategy liked by Glen as he could whip them about without any back chat. Unfortunately this means that now the initial driving force, Carl has stepped back, that you have company full of buyers etc who dont know what they are doing and without any guidance. It is absolute carnage!

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  • When you go and see certain department heads off buying and they are asking you what is what in terms off the make up of the individual product you are discussing, you have to worry....
    You can't buy denim/ bags/ own label/etc,etc.. one day, then claim to know what you are talking about buying footwear another day...
    Some staff are more than out off their comfort zone/depth at Republic.

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  • I think they are on the right path turnarounds take time !

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  • Mark Ashton

    Lots of mixed views, I think the main issue is that it’s lost its USP. The brand mix on Women's especially, it's not good, full of underperforming brands, an old fashion mix, brands that were highly thought of 5 years ago taking up too much room. The distribution policy of the bought brands needs to be questioned and addressed asap, no though process. When you can buy the same brands in New Look, ASOS RED and Debenhams over the road why on earth would it ever be considered? That's really worrying. The best brands will not partner Republic because of the current adjacencies. It's as clear as day what needs to be done but wil someone spot it and play the card......?

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  • The trade is obsessed with going up market therefore consumers are giving stores like Republic the middle finger. Brands and retailers aren't living in the real world and need to wake up - fast.

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  • Republic did not go upmarket it's trying to recover from years of neglect......

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