THE FUTURE of the retail chain Republic could be at risk after Mike Ashley’s Sports Direct failed to convince enough landlords to agree to new rent terms on its stores.
Sports Direct, which bailed the retailer out of administration in February, met with landlords last month and offered to pay rent at the stores equivalent to 15 per cent of sales or half the current passing rent.
Ashley and his lieutenant, chief executive Dave Forsey, have threatened to close Republic unless 75 per cent of landlords agreed to the deal by its 31 May deadline.
However, only 50 to 60 per cent have agreed to the terms, City A.M understands.
Sports Direct and CBRE, the property consultants handling the proposals, both declined to comment yesterday.
A failure to strike a deal could see Republic’s stores closed ahead of the quarterly rent due date at the end of June. But Ashley may also decide to keep the brand trading at those stores that have agreed to the leasing deal.
The Newcastle United owner’s sports retail empire bought Republic as well as its own brands, SoulCal, Fabric and Crafted, in February for an undisclosed sum – safeguarding around 114 stores and 2,100 jobs.
Republic, which was owned by private equity group TPG, collapsed after sales declined amid fierce competition and weak demand.
The retailer now forms part of Sports Direct’s new lifestyle division, which it created last year after buying a majority stake in Sir Tom Hunter’s fashion business USC.