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Brands wary of new USC contract terms

USC suppliers have raised concerns over revised contracts issued by the young fashion chain’s new owner Republic, which appear to give brands less control over their stock.

USC was bought out of administration by Republic on January 16. Both chains are owned by Sports Direct.

It is understood new contracts issued to suppliers following the deal do not include a retention of title clause, which would allow brands to retain ownership over any unsold stock. Some suppliers have told Drapers they want to add another clause to ensure their stock will not be sold in Sports Direct’s stores or online.

Sport’s Direct is understood to be negotiating the terms of each contract individually. Once they have been signed, any outstanding debts owed to a supplier will be paid.

One agent for a brand that sells to USC said: “We are still waiting for our contract, but we will require a distribution clause so we don’t end up in Sports Direct.”

The managing director of another brand said: “No one is happy with the deal; you start trading with one company and then suddenly you are now trading directly with Sports Direct. Like others, we have a clause in the new contract to state our lines of distribution.”

Sports Direct has told some brands it does not intend to close up to a third of USC’s 90 stores, as widely reported earlier this month. It apparently intends to close a “handful”, but open 20 over the next two years.

However, one source said: “They are continuing with USC as the concept name for the present, but plan to convert some shops to the Republic fascia.”

Another managing director of a menswear brand said: “They are sorting our rent issues and then things will move forward. They had sizable rents to deal with and that was Ashley’s way of taking action. USC will come out of this and continue to trade.”

Ashley had planned to rebrand 24 USC stores as Republic at the time USC bought Republic out of administration in early 2013. However, in September the same year, Sports Direct began switching all 29 Republic stores to the USC fascia, but kept Republic as a separate company.

As part of the administration process 150 members of staff at USC’s warehouse in Dundonald, Ayrshire were made redundant on January 7.

Sports Direct declined to comment.

Readers' comments (1)

  • darren hoggett

    Nobody is forcing any supplier to go with Ashley but brands are getting greedier and lazier and increasingly go for the fast, cheap, short sighted option - big numbers.

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