Young fashion retailer Republic has collapsed into administration, with all head office staff being made redundant today and the future uncertain for the remaining hundreds of staff.
The business, which employs 2,500 people, has appointed Hunter Kelly, John Sumpton and Alan Hudson of Ernst & Young as administrators.
Joint administrator Kelly said: “Republic suffered poor trading results in the autumn, and whilst sales picked up in December there has been a sudden and rapid decline in sales in late January.
“The impact on cash flows has resulted in the business being unable to continue to operate outside of an insolvency process. Unfortunately, it has been necessary to make 150 employees at the head office in Leeds redundant.”
He added: “We will continue to trade Republic, with a view to selling the business as a going concern. The brand Republic is well recognised, particularly in the north. It has a powerful website offering, owns well-known brand names, and has some very attractive and profitable stores.”
Ernst & Young has also set up a helpline to help people with enquiries. They can be reached on 0113 298 2450.
This follows on from reports last week that the young fashion chain’s owner, private equity group TPG, had drafted in KPMG to advise on it restructuring to help boost profits by selling off loss-making stores.
The retailer’s financial accounts have been hit hard by the recession. In its latest results sales declined by 2.3% to £177m and operating margin reduced to 2.1% (against 15% in the previous year) in the year to January 29, 2012. Pre-tax profit fell from £27.3m in the previous year to £3.2m.
In January Drapers revealed the young fashion retailer was looking to offload as much as 40% of its store portfolio after its plan to introduce higher-end brands failed to take off.
Sources said the retailer was considering the closure of 50 of its 120 stores to reduce costs from loss-making locations.
Last week Republic shut down individual store Twitter accounts and instead instructed followers to look at @republicfashion.
Republic chairman Andy Bond left the business at the end of January after two years at the helm. Sources indicated that Bond had decided to leave back in October, but remained in place until the end of Republic’s financial year.
Republic is the latest casualty for the fashion world this year. In January Drapers broke the news that streetwear brand Gio Goi had gone into administration, which has since been bought by JD Sports Fashion.