Blue Inc, the young fashion retailer chaired by Sir Stuart Rose, has emerged as the early front-runner to snap up collapsed branded fashion retailer Republic.

The fast-growing retailer is thought to be interested in acquiring the business with a view to running it as a 50-store operation.

Blue Inc chief executive Steven Cohen said: “We are watching the situation with interest. We believe Republic is a strong brand, especially in the North.”

Blue Inc has a strong track record of turning around collapsed businesses. It bought bust menswear retailer Officer’s Club’s brand in March 2011 and 46 of its stores, and has since built the business up to more than 60 shops.

Republic, backed by private equity firm TPG, crashed into administration on Wednesday with Ernst & Young appointed as administrator.

Trading has declined at the young fashion retailer, which sells brands including Diesel, G-Star Raw and Vero Modo, over recent months.

Ernst & Young joint administrator Hunter Kelly said: “Republic suffered poor trading results in the Autumn, and while sales picked up in December there has been a sudden and rapid decline in sales in late January.”

The administrator has already axed 150 head office staff. Republic, which has 121 stores, employs 2,500 staff.

Ernst & Young will continue to trade Republic as it seeks to sell the business as a going concern. TPG acquired Republic in June 2010 in a deal valuing the retailer at about £300m.

The retailer, which added 20 stores over the past three years, had vowed to double its store count to become a 250 store chain, however, it backtracked over the past year. It had been in talks with landlords over recent weeks to move to monthly rents and had been vying to shed stores.

It is thought that Blue Inc could face opposition from Sports Direct, which could also be interested in snapping up some or parts of the business.

The sports giant acquired a majority stake in branded fashion chain USC, a key rival of Republic, in 2011. This created the basis of its premium lifestyle division, which the retailer has since boosted with further acquisitions.