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In the UK, a luxury footwear retailer is closing 10 locations, with further closures to follow in the coming weeks, as it enters into a Company Voluntary Arrangement (CVA) to secure its future.
Popular brand Russell & Bromley has announced that Next has acquired its chain in an administration deal in what is seen as a major blow to high street fashion, resulting in the closure of ten of its stores.
The move comes at a time when the legacy retailer is struggling to restructure its debt and pivot to a more sustainable “fewer, better” store strategy.
What immediate impact does the shutdown have on consumers?
The immediate closures will affect around ten of the brand’s 60 UK locations. According to the UK stores, the brand closed its Covent Garden store on Wednesday and will close its Bath and Harrogate stores the very next day. At least three stores in the Chelsea and Mayfair districts of London and the Bluewater shopping center in Kent were also affected.
What was the reason for the closure?
The decision follows a period of difficult “trading conditions” and rising operating costs that have plagued the retail sector. Although the brand has not released a final list of affected locations, prominent locations in major cities are facing challenges and closing their doors as the company looks to shed underperforming locations.
The restructuring is being overseen by specialists Gavin Maher and David Soden from Teneo Financial Advisory. Next plans to take on 40 employees as part of the agreement with the retailer.
The main objective of the CVA is to enable Russell & Bromley to renegotiate lease terms with landlords and optimize its physical footprint to focus on its most profitable flagship locations.
The £2.5m deal is expected to result in significant job losses
Why is Russell & Bromley restructuring?
Founded in 1873, Russell & Bromley has been a staple of British luxury for over 150 years. However, like many legacy brands, it has struggled to adapt to the post-pandemic retail landscape. The company cited several factors for the current crisis, but chief among them is changing consumer habits that have led to an increase in online shopping and a decrease in footfall in traditional shopping districts.
Economic pressures, high inflation and the cost of living crisis are also to blame, which have caused consumers to shy away from luxury investment purchases. Rising business rates and energy costs have also made it increasingly difficult to maintain a large portfolio of physical stores.
Brand Strategy: A “Less, Better” Approach
Despite the closure of several standalone stores, the brand’s leadership remains optimistic about the future. The retailer says the restructuring is aimed at “right-sizing” the store rather than closing it completely. Russell & Bromley is a popular brand for many celebrities and influential people, including actors such as Kate Middleton, Katie Holmes and Billie Piper, among others.
By reshaping its strategy and focusing on a smaller number of high-performing stores, the brand now aims to improve its e-commerce platform and return to profitability.
What does the CEO say?
Interim CEO Andrew Bromley has reportedly stated that the CVA is a necessary step to protect the long-term viability of the brand and the majority of its workforce.
He emphasized that the brand remains committed to its core values of quality craftsmanship and service, albeit through a more modernized business model. The brand is also looking to be acquired by another brand.
The broader retail context
Russell & Bromley is far from the only victim of the current high street downturn. It joins a growing list of retailers, including Ted Baker and The Body Shop, that have faced significant restructuring in 2024.
For loyal customers, the brand’s remaining branches and online shop will continue to operate as usual during the restructuring. However, the loss of these ten locations marks the end of an era for several local high streets that have featured the iconic red and white logo for decades.
