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Republic seeks backers for overseas openings

Branded young fashion chain Republic is expected to seek new backers to help it push further south in the UK and fund overseas store openings for the first time after the business was effectively put up for sale by its private equity owners Change Capital.

Sources close to the 103-store business told Drapers that Republic had already attracted significant interest from potential franchise partners wanting to expand it into a number of overseas markets.

The chain is also significantly under-represented in the south of the UK. It has just one store in London, at Westfield London.

Last week, Change Capital, which in 2005 bought a majority stake in the retailer in a deal that valued Republic at £105m, hired financial services firm Rothschild to advise it on whether to sell, float or refinance the business.

The recent IPO of Superdry owner SuperGroup is believed to have given Change Capital the confidence to test the market for valuations for Republic, which has traded strongly throughout the recession. However, sources close to the situation said a stock market float was an unlikely option.

Market sources said Republic, which has annual sales in excess of £200m and EBITDA of more than £30m, would be valued at between double and triple the 2005 valuation.

One source said: “Republic is not even on [London’s] Oxford Street. It’s a cash-generative business which has shown itself to be resilient.”

Chief executive Tim Whitworth and founder Carl Brewins own more than 40% of Republic. They are expected to retain their shareholding and continue to lead the business following any sale.

Republic sells brands including G-Star, Firetrap, Diesel, Miss Sixty and Fenchurch, while its own brands including Miso, Crafted and Soul Cal represent close to two thirds of sales.

Sarah Peters, senior retail analyst at retail analysis firm Verdict Research, said: “The multi-brand and own-brand mix allows Republic to target a broad customer base. There is certainly potential for a lot more expansion. Over the past two years Republic has become more prominent, and the stores are impressive.”

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