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.”
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