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Tuesday, 12 February 2013

Republic in administration

Republic looks like it is the next retailer to fall.  The chain has 121 shops and employees 2500 people.  There were rumours last week that the business had fallen into difficulty because KPMG had been brought in to advise on how it could shed some of its stores.  In the past, this news would not have lead to rumours of its demise but this last Christmas trading period appears to be have been a game changer with so many retailers failing.  Ernst and Young are likely to be lined up as administrators according to sources.  We presume that KPMG are the auditors that would explain why they cannot be the administrators.

High rates, low consumer spending, car park charges, too many stores, competition from supermarkets, Oh and the Internet are all factors in many retailer's difficulties.

Could a CVA or company voluntary arrangement have saved this latest business?  Perhaps, but the business needs to be viable longterm, and the lenders on side, otherwise administration is the likely outcome.

The retailer  is owned by private equity group TPG

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