Administrators Move In To Republic and Devalue Company Worth?
With more closures of major retailers being reported recently it seems that high street brands are being forced to call in administrators due to tough economical climates, however one of the fallen few seems to have Although financial problems often consume businesses, their requirement to call in administrators is designed to be a measure that preserves the worth of the company while trying to rectify the constraints that the financial strains have forced upon the company. It seems that the company that has stepped in to help Republic have unwittingly made the situation worse from an online point of view after their actions towards the clothing company's website led to a mass reduction in search visibility that the website once held.
Although the process of ceasing trading online seems to be a normality for companies that have entered administration, a look at the Republic site indicates that the company behind the process have simply replaced the homepage of the former website with a page that explains that the brand is holding a "Massive Clearance Sale" with details of the company being in administration.
Prior to administrators being called into the company, the online proportion of the brand was a well-established property within the clothing industry which attracted millions of internet shoppers every month but following the decision by the administrators to replace the site with their new 6 page site, the strong search engine visibility has been reduced on a massive scale.
The fact that the online aspect of the company, which was by far the most profitable, has been cut from the company offering could be seen as a poor move on the administrators behalf. Complications arise when making payment with credit and debit cards to a company under administration, as a result the administrators felt it was necessary to cease trading online, taking the custom back onto the high street.
Although the company is not selling online at this moment in time, until they either resolve the financial problems or find a buyer for the brand, there is no real explanation for what the administrators did to the massively popular clothing website. It shows a lack of consideration of the impact that a sudden change to the site would have.
We were lucky enough to be able to see the drops happen through our tracking of keywords over a large scale, covering over 4 million pages so we can see where the site previously ranked within the search engine rankings and can clearly see the sudden drop of rankings which followed.
Clearly the administrators failed to consult with any industry professional in regards of the action that they should take surrounding the online presence that the company held at the time of entering into administration.
What Should Have Been Done?
Despite the company struggling to pay rent for their presence on the high street, sales on the online shopping side of the company was strong, however the restrictions that they faced by entering into administrative measures meant that they could no longer operate sales through their site, but simply replacing a well created and optimised website with a six page mini site surely wasn't the best possible step.
With rankings such as ‘dresses', ‘men's clothing', ‘t-shirts' and many more previously ranking on the first page of the Google search results, the drops that followed the alteration to the site evidently placed yet another nail into the coffin for the company that had worked so hard to develop an online store that was serving millions of users each month, making this one of their biggest assets held within the business, well now it isn't worth anywhere near as much.
One of the most attractive aspects of a potential buy out for any interested party would have been the opportunity to be able to assume control of one of the biggest online clothing sites in the UK and instantly have a customer base to be able to market their products to, something which is now no longer available due to the rash actions undertaken by the administrators regarding the web property.
If sales were no longer a viable option for Republic online now that they are in administration, a more competent method to have handled this would have been to keep the site active but to disable the shopping cart, allowing the rankings to remain intact until the administrators were no longer in control.
A sorry time for a site that has become one of the major clothing brands in the world of online shopping but a telling sign that often online presence is overlooked as being an asset held within a company.
Update: Since writing this post on Friday it seems that Google have allowed the site to break back into the search engine ranks, although not as high as they were previously.
Taking a look at the site it seems that the site pages no longer 302 redirect, however they show the same content on each of the pages, so we believe that it will only be a matter of time before Google once again knock them out of the rankings into the internet abyss.
3 Comments
Jonathan - http://www.breaktheseal.co.uk
They should have just 503’ed it.
I doubt the company is attractive to buy in the slightest anyway regardless of the strong web presence. It has a stupid company structure owned by various firms based in different locations. Could have portioned it off but would be a whole can of worms.
They got bought out a few years ago by a US Private Equity firm who still managed to ship £40 million to the Caymen Islands in dividends over the last 5 years. (which begs the question it could have easily been saved had they wanted to). Just another overseas buyout that bleeds the company dry and exit leaving a good chunk of people looking for a new job.
Alex Graves
Hi Jonathan,
Thanks for your comment.
As for your belief that the company would not present an attractive opportunity to potential buyers I feel that I have to say that I disagree with that, the sheer size of the traffic that the site was seeing on a monthly basis would have been very appealing to some of the major online brands, such as ASOS or similar.
Although having said that, buying the high street aspect of the business will come with a risk unless the buyers are willing to buy their way out of the debts that are held within the company.
In the time of an economical strain, the thought of all those people being out of a job is upsetting but unfortunately that is the way that the company have been forced to cut back and i presume that the administrators will have had a hand in coming to that decision.
The fact that the online aspect of the company was the profitable aspect while the high street version of the brand was the one that has quickly built up debt, you have to simply sit and wonder what they were thinking when they opted to kill the site in the way that they have done.
Jonathan - http://www.breaktheseal.co.uk
Hi,
Yeah, obviously buying a website that’s ready made to make sales with a boat load of traffic is very attractive but in this case the complicated Republic Group structure will definitely put potential buyers off.
Even if they had handled it better in terms of preserving SEO value I doubt it would have made much difference.
This business shouldn’t have gone into administration. Yet again a US firm with no self interest in the company just does what they want. What do they know about running a Northern High Street Retailer? Nada. Asset strip and ditch it. Clearly what happened here.
I agree though any smaller companies that go into admin that have a strong web presence should look to keep the value of their website. Perhaps it’s something that Administrators don’t yet appreciate or have no best practice guidelines in place?