Tue, 12 Feb 2013 | ADMINISTRATION
Clothing chain Republic looks set to become the next high street business in administration after struggling with poor sales.
Ernst and Young are poised to take control as administrators of the ailing Leeds-based retailer, which employs around 1,000 staff across its 120 stores.
During the late nineties the business enjoyed a surge in popularity and pushed forward with a rapid expansion programme. However, as consumers tightened their purse strings in the wake of the recession and changed their shopping habits with the ubiquity of the internet, Republic's sales have declined and the group now looks set to join the long list of retail administration that have hit the headlines in the past couple of months.
At the moment, Republic is owned by TPG, a private equity firm that bought the business in 2010 for around £300 million. However, the company can trace it roots back to 1986 when it started selling denim clothing from Leeds before growing to stock other brands of similar styles of fashion, such as Firetrap, Diesel and G-Star, that are in demand from its target youth market.
The company recorded pre-tax profits of £3.7 million in the year to 29 January 2012, along with sales of £177 million. The figures represent a decline of over 85 per cent on the previous year's profits of £27.3 million. Republic's cash reserves also dropped over the period from around £15 million in the year to January 2011, to just £6 million in the following year.
News of the administration comes just a week after Andy Bond, the former chief executive of Asda, quit as Republic's chairman following the appointment of KPMG to advise on restructuring.
Update 13th February, 2013:
Republic has confirmed today that its fate is indeed now in the hands of the administrators. The company Twitter account announced: Sadly #Republic is now in the hands of Administrators. We did all we could but it's simply too tough out there. Thanks for your support.
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Related news:
Pre-pack administration woes continue
HMV administration highlights shift in high street trends
Retail administrations - who's next?
VIEW the latest list of businesses in administration
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