UK: Republic enters administration, 150 jobs axed
Republic operates 121 stores in the UK, employing 2,500 people
Youth fashion brand Republic collapsed into administration today (13 February) with the immediate loss of 150 jobs, after suffering a rapid decline in sales.
Hunter Kelly, John Sumpton and Alan Hudson from Ernst & Young have been appointed as administrators of the company, which is owned by private equity group TPG.
The Leeds-based retail chain, which operates 121 stores and employs 2,500 people, saw sales drop rapidly in late January after poor trading results in the autumn.
Restructuring specialist KPMG was reportedly appointed by the group last week to offload some of its stores, after Republic chairman Andy Bond, the former chief executive of supermarket retailer Asda, stepped down.
"The impact on cash flows has resulted in the business being unable to continue to operate outside of an insolvency process," Kelly said. "Unfortunately, it has been necessary to make 150 employees at the head office in Leeds redundant."
Ernst & Young will continue to trade Republic, with a view to selling the business as a going concern.
The retailer is the latest to collapse in the challenging economic climate.
Last month, youth clothing label Gio Goi fell into administration after struggling to return to growth. Meanwhile, sportswear retailer JJB Sports called in the administrators at the end of last year after failing to restructure the business or find a buyer for its stores.
Commenting on the collapse of Republic, Conlumino consultant Anusha Couttigane said: "Operating towards the value end of the market should have placed the retailer in a strong position to take advantage of the consumer trend towards low-cost fashion.
"However, its target youth market has been the hardest hit demographic of the recession and it has struggled to appeal to them as effectively as rivals such as Primark, Asos or H&M. Fashion is a fast-moving industry where brand loyalty is fickle and Republic has failed to keep up with some pretty fierce competitors."
Jon Copestake, retail analyst at The Economist Intelligence Unit, agrees Republic has been threatened by online retailers like Asos tapping into the same youth fashion market.
"The outlook for the high street remains weak this year, and the acceleration in vacancies may exacerbate the situation by further reducing the potential footfall for stores that are continuing to struggle on," he said.
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