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Republic Close To Collapse: Sky Sources

(c) Sky News 2013

Republic is expected to call in administrators on Wednesday putting 1,000 jobs at risk, according to Sky sources.

The youth fashion chain will become the latest casualty of the high street in the year to date, following the collapse of HMV, Jessops and Blockbuster.

Ernst & Young have been lined up as administrators, says Sky News City Editor Mark Kleinman.

Private Equity (Swiss: PEHN.SW - news) firm TPG owns Republic, which last month looked to switch to monthly rental payments in an attempt to avert cashflow problems.

The US-based buyout giant has injected new capital into the company on at least two occasions since it bought it two-and-a-half years ago - with around £20m pumped in over the course of 2012.

Tough trading conditions have hit the company in recent months, causing it to slow down its store-opening programme.

Republic, whose target market is young adults, sells brands including Diesel, Firetrap and G-Star.

Anusha Couttigane from retail analysts Conlumino said rumours of trouble at the retailer have been circling for some time.

"TPG cites crippling rental rates as the main cause for the company’s breakdown, recently hiring KMPG in a desperate bid to offload some of its 121 stores," she said.

"In light of this, news of its administration suggests that attempts to renegotiate monthly payments have failed, bringing the business to a complete standstill and landlords facing the prospect of more vacant units on the high street."

She also stressed that its target youth market had been hard hit by the recession, adding: "Republic has failed to keep up with some pretty fierce competitors."

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