Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Suppliers count cost of Republic’s collapse

Brands face losing thousands of pounds and staff’s future uncertain after chain calls in administrators.

Republic’s future looks bleak after the young fashion chain plunged into administration this week following months of weak trading.

The chain fell into administration on Wednesday, with 150 head office staff made redundant and the future uncertain for the remaining 2,350.

As the dust settles, it seems likely that brands will be stung with losses of thousands of pounds, as credit insurance was pulled during the past year.

“They do owe us money but we are quite pragmatic about these things,” said one supplier. “They aren’t the
first and they won’t be the last. There might be some kind of deal to be struck with the new owner, as whoever buys it will need to make sure the suppliers are onside.”

However, insiders have suggested both JD Sports Fashion or Sports Direct - who have bought several businesses out of administration in recent years - are unlikely to buy the whole of Republic.

One former employee pointed out that both businesses own retailers - Bank in JD’s case and USC in Sports Direct’s - that would gain market share from Republic’s demise.

Other sources suggested young fashion chain Blue Inc could buy some stores, while former Republic chief executive Tim Whitworth is rumoured to be interested in a potential deal.

Freddie George, analyst at investment bank Seymour Pierce, said it was most likely that interested parties would “just cherry pick from the best stores”.

Both suppliers and analysts said Republic had struggled because of its branded proposition.

One ex-supplier said the chain gave “mixed messages” by placing premium labels next to cheaper own label.

A second supplier added: “They were a bit late to the brand game - everyone else already had their offer sorted.”

Another said: “Many of the brands it bought in were probably more expensive than the early-teen customers were willing to pay.”

Ernst Young administrator Hunter Kelly said Republic’s demise had been due to “poor trading”. He added: “While sales picked up in December there has been a rapid decline in late January.”

Nick Hood, head of external affairs for financial risk firm Company Watch, questioned whether Republic’s private-equity ownership could have prompted some suppliers and credit insurance companies to avoid risk by not supplying them.

“It’s unclear how easily the suppliers and landlords could have worked out what sort of financial risk they took when they did business with Republic,” he explained. “Secrecy may be great for private-equity investors when
times are good, but this lack of transparency may have played a role in its demise.”

● If the business goes under, first to be paid are the administrators, Republic’s bank and the staff.
● Any cash left is divvied up between ordinary unsecured creditors such as suppliers and landlords.
● Company Watch’s Nick Hood says every case is different but for creditors “the rule of thumb is a few pence in
the pound”.

Readers' comments (5)

  • Its about time some of the suppliers are protected-We all work hard getting a company good product and due to their poor performance we all suffer and then it's OK for them to open up again 5 minutes later!!
    There needs to be some stronger rules about just going into administration to rid yourself of debt but saddle your suppliers and landlords with it instead.

    Unsuitable or offensive? Report this comment

  • YET AGAIN IT DEMONSTRATES THAT CHEAPER--PILE IT HIGH IS NOT THE ANSWER.............BLU INC/PRIMARK/BANK/ASOS ARE ALL PUSHING THE PRIES DOWN AND WITH FOOTFALL FALLING YOU CANNOT PAY YOUR RENT/RATES AND STAFFING COSTS ON LOWER VOLUMNS WITH LOW MARGINS..........SURLY QUALITY COMES INTO PLAY.
    THE YOUTH WANT DISPOSABLE FASHION AT DISPOSABLE PRICE............WHAT ABOUT THE MID TWENTIES GUY AND UPWARDS.WHAT CHOICE DOES RETAIL OFFER THEM.

    Unsuitable or offensive? Report this comment

  • 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.

    Unsuitable or offensive? Report this comment

  • You can't do cheap and Premium. The younger end of the market aren't buying brands at all now - they haven't got the money - yet somehow shops like Republic thought they did.

    Unsuitable or offensive? Report this comment

  • All of the above points are correct, but I believe that there is/was one too many of this type of retailer on the high street . There had to be a casualty, and unfortunately it was Republic. I personally dont think that the story of administration finishes with Republic. I understand that there are other "big name" retailers on the brink!.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.