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.

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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