It’s just over a year since I spoke to former TK Maxx boss Paul Sweetenham as he began his tenure as chief executive of troubled young fashion chain Republic.
And this week his leadership faced one of its toughest tests yet as insiders told Drapers that a summit had been called between investors, banks and management to decide the business’s future.
Sweetenham took on a hell of a challenge when he accepted the top role. Having led the hugely successful value-led behemoth that is TK Maxx, he could hardly have switched to a more different enterprise. Republic had suffered hugely as a result of its overly large store estate and a brand mix that had failed to move with the times and had been overtaken by the likes of Asos in the youth market. In short, Republic was burdened by its property portfolio and was not seen as ‘cool enough’ by its target consumer.
I suspect Sweetenham didn’t realise the scale of the problem when he came on board, having been focused on a European remit in a much more mainstream part of the fashion market. But it must soon have become apparent as he sought to almost completely overhaul the brand mix and changed a large majority of his team.
But these things take time. He has an opportunity to refocus on the younger consumer, as Asos ironically seems to be broadening its own appeal to a more mainstream clientele, bringing on board Kate Bostock, for example, from Marks & Spencer. Sweetenham evidently realised this and has brought in some real talent in this area in the form of Caren Downie, formerly of Topshop and Asos, among others.
But with the best will in the world it takes 18 months, or three seasons, for the changes in the brand mix and the marketing efforts to kick in. Meanwhile, the underperforming stores and the challenges in the market have no doubt taken their toll on the business.
Our understanding is that the talks this week have been around the possibility of a pre-pack to effectively slash the property burden by around 50 stores, to relocate the business HQ to London, and to buy time for the changes to take effect on the product side. As ever there is speculation about whether Sweetenham will stay at Republic, and that remains to be seen. However, my contacts suggest his brand strategy will begin to bear fruit in the next year if he is allowed to continue, albeit the results would be far more positive and far quicker if he was not saddled with such a large estate.
Turning around a business in a recession is very much akin to the old oil tanker analogy and quick fixes are a thing of the more prosperous past. But patience is often limited when money is tight for even the largest of investors and the pressure on banks has never been greater.