The future of Republic is in jeopardy after owner Mike Ashley failed to secure enough support from landlords for his new rent proposals, Retail Week has learned.
It is understood that between 50-60% of landlords agreed to new terms proposed by Ashley’s Sports Direct, down on the 75% stipulated by the retailer.
In April Sports Direct, which acquired Republic out of administration in February, wrote to landlords threatening to close Republic stores unless 75% of property owners agree to new terms by 5pm on May 31, as revealed by Retail-Week.com.
One source said Sports Direct is now “weighing up its options” over the future of Republic, and could still opt to close the whole business down before the end of June. 2,000 jobs are on the line.
It is thought Sports Direct is now “weighing up its options” over the future of Republic, and could still opt to close the whole business down.
Last week Retail Week reported that landlords remained divided over any decision. One claimed that the landlord community did not want to be “beaten around” by Ashley.
Forsey outlined the terms in a letter sent to landlords in April, as revealed by Retail-week.com. The proposals include Republic paying the higher of either half the current passing rent, or a sum equal to 15% of turnover for each store to cover rent, rates and service charge.
Forsey wrote that landlord compliance on terms - including a three-month break clause and monthly rents - was essential.
He wrote: “The new Republic format relies on the leading branded suppliers viewing it as a viable proposition. Therefore, circa 75% of all landlords across the Republic portfolio must agree to the above proposal, otherwise we will have no other option but to close the stores prior to the June quarter day.”
CBRE is advising Sports Direct on the process.
Both Sports Direct and CBRE declined to comment.