In a significant move within the UK retail sector, FTSE 100 giant Next has finalised a deal to acquire the historic shoe brand Russell & Bromley. The transaction, valued at £3.8 million, involves a cash payment of £2.5 million for the brand and three prime stores, alongside £1.3 million for a portion of the retailer's stock.
Strategic Acquisition Amid Financial Challenges
Russell & Bromley, which opened its first shop in Eastbourne back in 1880, had been undergoing a restructuring process led by advisory firm Interpath. After failing to secure necessary funding, the company opted for a sale, culminating in this pre-pack insolvency arrangement. The deal excludes 33 remaining Russell & Bromley stores, which will continue trading as administrators evaluate their future prospects.
Andrew Bromley, the fifth-generation family leader of the firm, commented on the decision, stating, "Following a strategic review with external advisers, we have taken the difficult decision to sell the Russell & Bromley brand. This is the best route to secure the future for the brand, and we would like to thank our staff, suppliers, partners and customers for their support throughout our history." The sale is anticipated to receive court approval later today.
Next's Expanding Retail Portfolio
This acquisition marks another step in Next's strategy to bolster its market share by revitalising struggling brands. In recent years, the retail behemoth has acquired Cath Kidston in 2023 and rescued clothing brand Joules from administration in 2022. Next's portfolio already includes household names such as FatFace and Made.com, along with e-commerce partnerships with Gap and Victoria's Secret.
The move follows a successful festive period for Next, where international sales surged by 38.3%, surpassing guidance and contributing to a profit of £51 million. This performance led the group to upgrade its profit forecast to £1.15 billion, reflecting a 13.7% year-on-year increase. However, domestic in-store sales remained modest, with only 1.4% growth from footfall.
Competitive Bidding and Market Dynamics
Next faced competition in the takeover, with Retail Realisation and other potential bidders like Apparel Brands and investment firm Auralis also showing interest. Notably, Next recently withdrew from a similar deal with fashion brand LK Bennett, which appointed administrators this month.
Russell & Bromley, employing 450 people, has a rich heritage dating back to the late 19th century. The acquisition highlights the ongoing consolidation in the high street retail landscape, as larger players like Next seek to expand their influence through strategic purchases.
Both Next and Russell & Bromley were approached for further comment on the transaction.
