Five questions answered on Republic, the latest high street casualty
Republic calls in the administrators.
After falling sales, high street retailer Republic has called in administrators. We answer five questions on the next potential high street casualty.
Why have Republic called in administrators?
Owned by private equity group TPG, Republic is said to have called in the administrators Ernst & Young because of falling sales in a fiercely competitive part of the high street. The company focuses on the youth fashion market, which is fiercely competitive and under pressure.
How many high street shops does Republic have?
The youth fashion retailer, which was founded in Leeds in 1986, has 121 shops in the UK and employs about 2,500 staff.
What will happen to Republic’s stores?
Some could be snapped up. However, Matthew Hopkinson, speaking to the BBC believes that because the vast majority of them are in shopping centres, they could be difficult to fill.
"HMV and others have also been sitting in shopping centres and therefore I think the number of units which have gone in the last few months in shopping centres will make it far harder than 12 months to refill them," he said.
What are the experts saying?
Anusha Couttigane, consultant at retail research group Conlumino, speaking to The Telegraph said: "Despite TPG, the US-based private equity group which owns the brand, claiming that underlying sales have remained strong, annual accounts for January 2012 indicated that gross profits were down by 9.17pc and it appears little has changed since then.
"Nevertheless TPG cites crippling rental rates as the main cause for the company’s breakdown, recently hiring KMPG in a desperate bid to offload some of its 121 stores.
"In light of this, news of its administration suggests that attempts to renegotiate monthly payments have failed, bringing the business to a complete standstill and landlords facing the prospect of more vacant units on the high street.
"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."
What other high street stores have gone bust recently?
Other high profile high street casualties include HMV, the camera group Jessops and the DVD and games rental company, Blockbuster, plus electronics supplier Comet before them.