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Republic collapses into administration

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.


Readers' comments (8)

  • There was no higher end brands , there was less.....

    Facts right please.

    The fashion did not evolve quick enough.

    Model was dead and underinvested / neglected for years...

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  • Big stores in high rental locations not really the recipe for success.

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  • Totally agree .

    Some outstanding folks, but the challenge to repair the damage looks like it was too much.

    Shame, hole in the market now.....

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  • USC ,Bank,Scotts, beware

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  • Hear original owners making a bid. Lucky chancers.....

    Certain to put it to permenant history.....

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  • I would say it's a bigger story than the one written about this chains demise......more a sign of the changing shopping habits of the the young sector. It was easy just geared up and opened in every mall in the UK. The indies struggled as their trad shopping areas declined and they could not afford to rent in the malls and join the party so closed down or got left with the crumbs and the GBP (Great British Public) shopped in the malls...and then came along broadband, then smartphones and the average young girl discovered a whole new cool world online full of niche products / labels / brands that she could select from directly...if a celeb wore something she loved.... a few clicks and she could source the exact item directly from the label or even the celebs own site......not hunt about for a copy in the chains or shop a filtered snapshot of a range that was diluted by commercially minded buyers...and so her shopping habits changed. She still liked to wander the shopping centres for the odd impulse purchase but it suddenly felt so samey, so sterile, so disconnected.

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  • Asos / Topman possibly RI, rule the roost on young fashion, the others Primark/Blue Inc etc don't come close, and actually whilst some of the price entry product is at the low end of quality most isn't, what drives their business is a complete understanding of the target market and a management in place that fully grasps the high street property situation and multi-media mix as well as a realisation that any growth for the foreseeable future will not come from the UK.There is another time bomb ticking in this country, another black hole, landlords are putting many people put of business with rentals being out of touch with foot fall and spending on the high street, reason being is that they cannot lower rents, borrowings from banks and not least returns on pension funds are pegged against these rents, if they default or reduce percentage return rates then we have another sub prime situation and black holes in pensions, result is that rather than take lower rents then they would rather hold out for a coffee shop chain to come to their rescue, these are the only guys paying rent premiums, well it's getting to the stage where empty shops become unsustainable, expect a correction soon and we will see the small entrepreneur rescue the high street as they did in the past with innovative product that the customer wants to touch and feel, even small on -line only retailers are starting to look towards small stores to promote their on-line offer. It's reality check time for the landlords, but beware, we have another lending default and pension crisis looming.

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