UK high street giant in administration owing £59m and shops closed

Administrators shut down the Oxford brand at the Westgate centre in April, one of 33 that shut down nationwide.

Best known for its premium leather footwear and handbags, Russell & Bromley fell into administration earlier this year with debts of £59.3 million and losses reaching £20 million over the past two years.

The historic retailer, founded in Sussex in 1880, operated stores nationwide but its financial pressures proved insurmountable, according to administrators Will Wright and Chris Pole of Interpath Advisory, who were appointed in January.

READ MORE: UK-wide warning as invasive plant species grips country

A spokesman for Interpath Advisory said: “Following the announcement regarding the sale of the Russell & Bromley brand and certain assets to Next plc, the joint administrators can confirm that a phased closure programme for the remaining Russell & Bromley stores is now complete.

“All stores that did not transfer to Next as part of that transaction closed.

“Regrettably, these closures mean that the majority of employees working in the non-transferring stores have been made redundant.

“The administrators and their teams are engaging closely with all affected staff and will be providing support throughout the process, including assisting individuals in submitting claims to the Redundancy Payments Service.”

At the time of administration, Russell & Bromley owed £59.3 million.

A total deficiency of £35.7 million is estimated, with assets totalling £8 million available for preferential creditors and £5.6 million for unsecured creditors.

The company also owed £3.2 million to HMRC.

Administrators described the final years of the business as deeply challenging.

The administrators said: “The group was relatively highly loss-making, with these losses due to a combination of falling sales, increasing operational costs and a relatively high fixed cost base.

“Further to this, the wider UK market has been difficult for retail businesses with challenging trading conditions characterised by high inflation and suppressed consumer demand.”

In an effort to fund continued trading, Russell & Bromley had sold off several freehold properties.

However, even these measures could not stem the mounting losses.

The company had drawn £2.1 million on a trade finance facility before entering administration.

NatWest exercised its set-off rights immediately upon appointment of the administrators, using the company’s remaining cash to clear its outstanding debt with the bank.

Most of the company’s 36 stores did not survive.

Only three stores—two in London and one in Kent—were included in a pre-pack deal with Next, which acquired the brand name and select assets.

The closure resulted in 400 job losses.

Interpath anticipates that a dividend may eventually be paid to unsecured creditors but has not yet determined the potential value.

The administrators said: “Based on current estimates, we anticipate that unsecured creditors may receive a dividend.

“We have yet to determine the amount of this, but we will do so when we have completed the realisation of assets and the payment of associated costs.”