Next agreed to purchase the Russell & Bromley brand of footwear out of bankruptcy for PS3.8million, securing its future but putting hundreds of jobs in danger as dozens stores are excluded from the deal.
The British retailer founded in Eastbourne in 1879 has struggled in a difficult trading environment on the high street.
The majority of Russell & Bromley’s retail estate, which is primarily physical in nature, will not be transferred to Next.
Limited store rescue leaves jobs uncertain
Russell & Bromley operates 36 shops and nine concessions in the UK and Ireland.
Next has agreed to take over three flagship stores in Chelsea, Mayfair, and Bluewater Shopping Centre, Kent.
As part of this acquisition, it is expected that 48 employees will be transferred.
Approximately 400 jobs will be lost in 33 shops and 9 concessions that are not part of the deal.
Interpath administrators said that the remaining shops would be open for business while they assess their options, which could include potential closures or sales.
The core deal is based on brand and stock
This acquisition comprises Russell & Bromley brand, related assets and stock worth approximately PS1.3million.
The price of the PS3.8million was not revealed in full.
Next stated that the acquisition would enable the footwear brand to focus on its heritage, as a high-end premium brand, centered on design, workmanship and curation rather than support a costly bricks and mortar network.
Andrew Bromley is the chief executive officer of Russell & Bromley. He’s a founding member and said that the sale decision was made after a review of strategic options with advisors.
He thanked staff, customers and suppliers for their continued support.
Next is expanding its brand portfolio
Next has been acquiring fashion and lifestyle companies in the past few years.
The company has acquired Made.com, Made.com brand, and Made.com intellectual property, as well as Cath Kidston and Joules at discounted prices.
Next is also the UK agent for Gap, Victoria’s Secret as well as FatFace.
The retailer’s disciplined approach towards costs, inventory management, and online logistics has received widespread praise under the leadership of Lord Wolfson.
Retail faces a challenging environment
Russell & Bromley’s rescue highlights the challenges facing long-standing retailers, as spending by consumers remains low and costs remain high.
In recent months, a number of well-known names entered the administration.
Both the Original Factory Shop, and Claire’s accessories chain are undergoing restructuring. The collapse of Bodycare last year resulted in around 1,000 jobs being lost.
River Island announced the closure of its stores in an attempt to prevent a larger failure.
Next has recently raised its profit projections for the full year after a successful Christmas period. This highlights the increasing divide between high-street competitors who are struggling and those with well-capitalised operations.
The deal is a way for Russell & Bromley to survive as a company, despite its shrinking physical footprint.
The post Next buys Russell & Bromley for PS3.8M, hundreds of job at risk could be updated as new developments unfold.
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