High street giant Next has acquired the prestigious British footwear brand Russell & Bromley out of administration, but the deal has led to the immediate closure of ten stores, with more sites set to follow. Next agreed to pay £2.5 million for the brand and its intellectual property, along with an additional £1.3 million for a portion of the current stock, bringing the total transaction to £3.8 million.
Store Closures and Limited Deal Scope
However, the acquisition only included three out of Russell & Bromley's thirty-six physical stores: the Bluewater, Chelsea, and Mayfair locations. According to industry reports from Drapers, the first ten stores have now ceased operations, with further closures expected imminently. Specific sites affected include the Covent Garden store, which shut its doors today, while the Bath and Harrogate branches are scheduled to close this Thursday.
Historical Background and Current Operations
Russell & Bromley was originally founded in 1880 by George Bromley and Elizabeth Russell in Eastbourne. The luxury shoe chain currently employs more than 450 people and is managed by Andrew Bromley, who serves as the chief executive. Following the strategic decision to sell the brand, Andrew Bromley expressed gratitude towards staff, suppliers, partners, and customers for their longstanding support throughout the company's history.
Next's Strategic Vision and Statement
In an official statement released after announcing the deal, Next emphasised its commitment to securing the future of this much-loved British footwear brand. The retailer stated, "Next intends to build on this legacy and provide the operational stability and expertise to support Russell & Bromley’s next chapter, allowing it to return to its core mission: the design and curation of world-class, premium footwear and accessories for many years to come."
Broader Retail Acquisition Strategy
This acquisition aligns with Next's growing portfolio of retail brands, which includes recent purchases such as Cath Kidston, Joules, Seraphine, and Made.com. Additionally, reports from Sky News indicate that Next is considering a potential takeover of British luxury handbag brand Radley, famous for its Scottie dog logo and founded in 1998 by Lowell Harder. Retail sources suggest that any deal for Radley might be conducted via a pre-pack administration, although they caution that negotiations are still in early stages and far from being finalised. Other interested parties in Radley include the investment and restructuring firm Gordon Brothers.
Economic Challenges and Future Outlook
The acquisition comes amid broader economic challenges for Next, including a £15 million cost impact from the Iran war, which has led to higher fuel and air freight expenses. The company has warned that if the conflict persists, it may need to increase prices to offset these costs. Next has already observed a sharp decline in sales across the Middle East, a region accounting for approximately 6% of its annual revenue, which could further affect costs, selling prices, and consumer demand across the wider group.
Despite these challenges, Next remains focused on leveraging its operational expertise to revitalise acquired brands like Russell & Bromley, ensuring their longevity in a competitive retail landscape.
