BRITAIN’S already fragile high street was dealt a fresh blow yesterday after fashion chain Republic collapsed into administration.
Ernst & Young, the business advisory firm, has been appointed as administrator and 150 staff at its Leeds headquarters were immediately made redundant.
The retailer, which sells youth fashion brands including Jack Jones and SoulCal, runs 121 stores and employs around 2,500 staff.
Hunter Kelly, joint administrator, said Republic was hit by poor trading results in Autumn and “a sudden and rapid decline in sales” in January.
“The impact on cash flows has resulted in the business being unable to continue to operate outside of an insolvency process,” Kelly said.
The group will continue to trade while Ernst & Young try to sell the business as a going concern.
Republics’s demise marks the latest in a string of casualties since the start of the year after Jessops, Blockbuster and HMV all entered administration.
US private equity firm TPG bought the chain in 2010 for £300m with the aim of doubling the size of the business to over 200 stores.
The firm has twice tried to inject more cash but the retailer has failed to stem falling sales amid fierce competition and weak demand, particularly among young consumers.
The latest accounts show sales declined by 2.3 per cent to £177m in the year to January 2012. Pre-tax profit slumped from £27.3m to £3.2m.
Former Asda boss Andy Bond stepped down as chairman at the end of January but a spokesperson said it was not related to the company entering administration.
ERNST & YOUNG
Alan Hudson, partner and head of restructuring at Ernst & Young, is acting as joint administrator of the fashion retailer Republic together with Leeds-based partner Hunter Kelly and director John Sumpton.
A licensed insolvency practitioner, Hudson has more than 24 years’ experience of working across restructuring and accelerated M&A. He also in the past headed up Ernst & Young’s transaction advisory services retail team in the UK and now has particular focus working with private equity investors.
Some of the major restructurings Hudson has worked on include Focus DIY, the hardware chain owned by private equity firm Cerberus, which appointed Ernst & Young as administrators in May 2011 and DTZ, the global real estate services firm which fell into administration in December 2011. It was then sold to Australian engineering firm UGL. In 2011, Hudson acted as joint administrator and receiver of London landmark Battersea Power Station, which was then sold a year later to a Malaysian consortium led by SP Setia and Sime Darby for £400m. Meanwhile Hunter, a partner since 1996, has worked on a number of insolvency appointments including Snackhouse, once one of the UK’s biggest snackfood makers which collapsed in 2001.