Next acquires Russell & Bromley

Next has acquired the shoe retailer Russell & Bromley in a pre-pack insolvency deal, extending its series of strategic purchases aimed at strengthening its foothold in the fashion retail sector. This acquisition allows Next to expand its portfolio by incorporating a renowned brand that has been struggling financially.

The terms of the acquisition include a £2.5 million payment by Next for the Russell & Bromley brand and three of its stores located in Chelsea, Mayfair, and Bluewater Shopping Centre. Additionally, Next will pay £1.3 million to acquire some of the company's stock. The deal, overseen by advisory firm Interpath, excludes the remaining 33 Russell & Bromley stores, which will stay open while their future is determined by administrators.

Next's purchase of Russell & Bromley reflects its ongoing strategy to revamp and integrate distressed brands into its business model. Previous acquisitions include the vintage retailer Cath Kidston and clothing brand Joules. By acquiring Russell & Bromley, Next may seek to leverage its extensive retail operations and online capabilities, drawing on its successful management of other legacy brands.

The acquisition comes on the back of a successful trading period for Next, which saw a notable improvement in international sales during the festive period. Aided by marketing investments and partnerships with platforms like Zalando, Next's profits rose, leading to an upgraded profit forecast of £1.15 billion. However, domestic in-store sales showed minimal growth, highlighting the complexity of the current retail landscape.

Looking forward, the acquisition is set to be ratified in court shortly. Russell & Bromley’s decision to sell follows an unsuccessful attempt to secure alternative funding. The move signifies the competitive nature of the fashion retail market, with Next outperforming other bidders such as Apparel Brands and investment firm Auralis. As Russell & Bromley transitions under Next's ownership, the focus will likely be on brand preservation and operation stabilisation, especially for the non-acquired stores.