A renowned retailer that collapsed into administration after 146 years owed more than £59 million.
Administrators said all remaining stores including two in Scotland have closed with 400 staff made redundant, and revealed how the final moments of the historic high street firm unfolded.
Russell & Bromley, operating across the UK including in Glasgow and Edinburgh, slumped into administration earlier this year and Next acquired the brand name and some assets including three of its 36 stores, two in London and one in Kent, in a pre-pack deal.
Familiar combined pressures of falling sales and increasing operational costs squeezed the firm founded in 1880 in Sussex and it could no longer offset deepening losses.
It specialised in “premium leather footwear and handbags, recognised for distinctive design and craftsmanship”.
A spokesperson for Interpath Advisory told this column the remaining 33 stores have now been shuttered.
UK high street giant collapsed into administration owing £59m (Image: PA)
“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,” the spokesperson said.
“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.”
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A report shows that when Will Wright and Chris Pole of Interpath were appointed joint administrators in January the total owed was £59.3m.
The historic footwear and accessories firm had racked up losses of £20m spread over the last two years.
“Historically, the business was funded from existing cash reserves, however, in recent years, a number of freehold properties were sold to fund the ongoing loss-making operations,” administrators said.
UK high street giant fell into administration owing £59m (Image: PA)
“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.”
Statement of affairs
In the statement of affairs three months after the administration, the estimated total deficiency is £35.7m, with assets including those available for preferential creditors at £8m, assets available for secondary preferential creditors £8m, surplus as regards preferential creditors £5.6m, surplus of assets after floating charges £4.8m, and assets available to unsecured creditors £5.6m identified.
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The administrators also said: “As at the date of appointment, approximately £2.1m was drawn on the trade finance facility.
“Immediately following the appointment of the joint administrators, NatWest applied their rights of set off, and used the company's cash at bank to reduce their indebtedness to nil.”
The firm also owed His Majesty’s Revenue and Customs £3.2m.
“It is expected that HMRC may receive distributions from other group insolvencies in respect of the same group VAT claim,” Interpath 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.”
Former Prime Minister Theresa May famously included a Russell & Bromley discount card in the official register of MPs’ interests.
