Next Secures Russell & Bromley Brand in £2.5m Acquisition Deal
High street retail powerhouse Next has finalised a significant acquisition, agreeing to purchase the esteemed footwear brand Russell & Bromley for £2.5 million in cash. This strategic move, conducted through a pre-pack administration process, sees Next acquiring the brand along with three key store locations in Chelsea, Mayfair, and the Bluewater Shopping Centre. Additionally, Next will pay £1.3 million for a portion of Russell & Bromley's existing stock, reinforcing its commitment to the brand's legacy.
Store Portfolio Under Review as Administrators Assess Futures
The transaction notably excludes 33 remaining Russell & Bromley stores, which will continue to operate while administrators from Interpath evaluate their long-term viability. This development places these outlets at potential risk, as the future of these physical retail spaces remains uncertain amidst the brand's restructuring. The sale follows Russell & Bromley's appointment of Interpath to lead a restructuring effort, after the retailer reportedly struggled to secure necessary funding, prompting a strategic review that culminated in this sale.
Next's Expansion Strategy Continues with Brand Acquisitions
This acquisition represents another step in Next's ongoing strategy to strengthen its market position by revitalising struggling high street brands. In recent years, Next has successfully integrated Cath Kidston after its 2023 administration and rescued clothing brand Joules from administration in 2022. The retailer, a top-performing enterprise on the stock exchange, also owns well-known brands such as FatFace and Made.com, while maintaining e-commerce partnerships with Gap and Victoria's Secret, showcasing its diversified portfolio approach.
Festive Performance Boosts Next's Financial Outlook
The deal comes on the heels of a robust festive trading period for Next, which reported a significant 38.3 per cent surge in overseas sales during Christmas, exceeding projections of 24.3 per cent. This growth was attributed to enhanced marketing investments and strong performance from European partner Zalando. The commercial uplift delivered profits of £51 million, prompting Next to raise its profit guidance by £15 million to £1.15 billion, marking a 13.7 per cent year-on-year increase and the third upward revision in just over five months. However, domestic physical store sales remained subdued, with only 1.4 per cent derived from walk-in customers during the festive season.
Competitive Bidding and Historical Context of the Brand
Next emerged as the successful bidder after competitive interest from other parties, including Retail Realisation, Apparel Brands (behind Bench and Hype), and investment company Auralis. Notably, Next recently withdrew from a similar arrangement with fashion label LK Bennett, which entered administration this month. Russell & Bromley, founded in 1880 with its first shop in Eastbourne, is currently led by Andrew Bromley, the fifth generation of his family to run the footwear retailer. The business employs 450 staff and has built a reputation for quality craftsmanship over its 147-year history.
Statements from Key Figures on the Acquisition
Andrew Bromley commented on the sale, 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." In a statement, Next expressed its intentions, saying, "This acquisition secures the future of a much-loved British footwear brand. 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." Will Wright, Interpath's UK chief executive, added, "Across its 147-year history, Russell & Bromley has been at the forefront of contemporary style. We're pleased therefore to have concluded this transaction, which will preserve the brand and the commitment to quality craftsmanship that it has become so well known for. Our intention is to continue to trade the remaining portfolio of stores for as long as we can, while we explore the options available."
