New owner Sports Direct has slashed the price administrator offered brands and suppliers for Republic stock.
Republic stockists are set to lose out on millions of pounds in the wake of the young fashion retailer’s acquisition by Sports Direct.
Drapers understands that Republic’s creditors, which include brands and suppliers, have been offered just 28p in the pound for any stock held by the retailer at the time it fell into administration, or that was waiting to enter stores.
Collectively, brands could lose out on an eight-figure sum.
Administrator Ernst & Young had originally offered 60p in the pound prior to Sports Direct’s acquisition of the majority of Republic. However, the sportswear business is now offering less than half that amount.
It is thought brands owned by Sports Direct’s competitor JD Sports Fashion are at the bottom of the pile to receive payouts.
The head of one young fashion brand said. “Sports Direct is trying to get away with paying half [the sum agreed] - while discounting the stock it hasn’t paid for.”
One young fashion figure said Sports Direct owner Mike Ashley could make millions from this season’s stock alone.
“Around 3.2 million garments came with the business, so even if he sells every one of them for a fiver he’ll have made absolutely millions. He’s a very clever man,” he said.
“They are being difficult about it,” said another source. “We haven’t been paid and so we’re asking if we can have our product back. We had an awful lot of stock in Republic, but we don’t want to stay in there anymore.”
Suppliers, which are being offered the same deal as brands, could be the worst hit given the higher proportion of Republic’s own-label products within the retailer’s brand mix. “They will really be stung,” a source said.
Separately, a number of the head office staff made redundant when Republic went into administration in mid-February are understood to have been reappointed.
Sam Brocklebank, head of merchandising, and buyer Richard Shackleton are among those believed to be returning.
Sports Direct declined to comment.
Last week it was reported that Sports Direct was looking to secure turnover-based rents for its newly acquired Republic stores.