In the UK, a luxury footwear retailer is shuttering 10 locations with more closures in the upcoming weeks as it enters a Company Voluntary Arrangement (CVA) to secure its future.
In what is being seen as a significant blow to the high street fashion, the popular brand Russell & Bromley has announced that its chain was acquired by Next in an administration deal, triggering the closure of ten of its stores.
The move comes as the heritage retailer grapples to restructure its debt and pivot toward a more sustainable "fewer, better" store strategy.
What is the immediate impact of the shutdown on consumers?
The prompt closures affect approximately ten of the brand's 60 UK locations. According to the British outlets, the brand shut down its Covent Garden store on Wednesday and will close down Bath and Harrogate locations the very next day. At least three stores in the Chelsea and Mayfair neighbourhoods of London and Kent's Bluewater shopping centre have also been impacted.
What prompted the closure?
This decision follows a period of challenging "trading conditions" and rising operational costs that have plagued the retail sector. While the brand has not released a definitive list of the affected sites, prominent locations in major cities have been facing challenges and are closing their doors as the company attempts to shed underperforming units.
The restructuring is being overseen by specialists from Gavin Maher and David Soden of Teneo Financial Advisory. Next plans to transfer 40 employees to its company during its deal with the retailer.
The primary goal of the CVA is to allow Russell & Bromley to renegotiate rent terms with landlords and streamline its physical footprint to focus on its most profitable flagship locations.
The £2.5million deal is expected to see 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 heritage brands, it has struggled to adapt to the post-pandemic retail landscape. The company cited several factors for the current crisis, but primarily it's the shifting consumer habits that have marked an increase in online shopping and has reduced footfall in traditional shopping districts.
Also to blame is the economic pressure, high inflation and the cost-of-living crisis that have led consumers to pull back on luxury "investment" purchases. The rising business rates and energy costs have also made maintaining a large portfolio of physical stores increasingly difficult.
Brand's Strategy: A "Fewer, Better" Approach
Despite the closures of several of its standalone stores, the brand's leadership remains optimistic about the future. The retailer states that the restructuring is designed to "right-size" the business rather than shut it down entirely. Russell & Bromley is a go-to brand for many celebrities and influential people, including actors like Kate Middleton, Katie Holmes, and Billie Piper, among others.
Now, by reinventing its strategy and focusing on a smaller number of high-performing stores, the brand aims to enhance its e-commerce platform and return to profitability.
What is the CEO saying?
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 emphasised that the brand remains committed to its core values of quality craftsmanship and premium service, albeit through a more modernised business model. The brand is also eying another brand to take over.
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 stores and its online shop will continue to operate as usual during the restructuring process. However, the loss of these 10 locations marks the end of an era for several local high streets that have hosted the iconic red-and-white logo for decades.