Fashion retailer Republic is set to enter administration, putting nearly 1,000 jobs at risk, as the UK's high street continue to suffer from weak trading conditions.
The Leeds-based company which operates 120 stores, have already hired the business services firm Ernst & Young to handle the administration, according to media reports.
Republic has been suffering from poor trading conditions in recent months, as consumers limited their spending in line with the ongoing austerity measures. Additionally, the company's focus on the north of England, an area that has been hit the most by the recession, made the conditions worse.
Due to the adverse trading conditions, the company has been in talks with store landlords to reduce its rent and postpone payment dates.
Adding to the worries, Chairman Andy Bond, a former Asda boss, has reportedly stepped down last week from his post and KPMG was hired by the company to advice on closing some of its stores.
If gone bust, Republic would be the latest casualty on the high street, following the collapse of Jessops, HMV and Blockbuster which resulted in nearly 10,000 job losses in total. Giving a bleak start for the sector in 2013, the retail failures are expected to increase the high-street vacancy rate to a record 19 percent.
Republic is owned by private equity group TPG, which bought the company in June 2010 in a deal valuing the retailer at about £300m ($469.5m, €348.9m). Following the acquisition, TPG has twice been forced to inject more cash to keep the chain alive. In November TPG, Bond and Republic's founders pumped in £20m.
Started in Leeds as a men's denim retailer in 1986, the company currently owns fashion brands including G-Star, Diesel and Firetrap.
The youth fashion retailer recently hired ex-TK Maxx boss Paul Sweetenham as chief executive. In the year to January 2012, Republic reported an 86 percent decline in profit to £3.7m.