Sports Direct is to close 20 Republic stores after major landlords failed to back its cut price rent proposal for the chain.
It is understood that major landlords Land Securities and Intu have rejected Sports Direct’s proposal to cut rent on Republic stores to 15% of the shop’s turnover or 50% of existing rent, rates and service charge, depending on which was higher.
It is understood that landlords were concerned about how turnover would be calculated given the retailer’s growing online business and believed that the space could be re-let.
Retail Week revealed on Wednesday that about 60% of landlords had agreed to the proposals, down on the 75% Sports Direct had said it required in order to continue trading. Sources told Retail Week this morning that despite falling short of the proportion required, the retailer was in “delicate discussions” regarding the remaining stores with the aim of keeping as many trading as possible.
A Sports Direct spokesman said the retailrer is set to redeploy the 500 staff employed in the 20 stores to other Sports Direct and USC Stores. He added that the retailer was confident of hitting the 75% target in the coming days.
He said: “We are disappointed that certain landlords have not had any flexibility towards our proposals, putting nearly 500 jobs at risk. However, we are determined that these colleagues will be absorbed into the USC, Republic and Sports Direct networks.
The spokesman added that Sports Direct expects to keep about 80 Republic stores on the high street after it received backing from its remaining landlords.
A list of the 20 store closures was not availble.
Republic collapsed into administration with debts of up to £157m before Sports Direct bought 116 of its stores in February. It has already closed some stores across the UK.