What do Pier 1, Radio Shack, Stein Mart, Dress Barn and now Ralph & Russo have in common? They are all currently fall under the ownership umbrella of Retail Ecommerce Ventures. On the heels Ralph & Russo announcing in March that it had entered into administration in order to “restructure the company and ensure its ongoing success,” the London-based high fashion house has been acquired for an undisclosed sum by Retail Ecommerce Ventures, which has readily been snapping up bankrupt brands since it launched in 2019, in furtherance of what the Miami-based firm calls a “strong track record of acquiring and growing iconic retail brands globally.”
In a statement on Thursday, Retail Ecommerce Ventures (“REV”) revealed that it has taken a controlling stake in Ralph & Russo following “a thorough and extended sales process that generated an immense amount of global interest and resulted in numerous parties submitting bids.” Media reports this spring suggested that “a handful of UAE and Qatari buyers” were among those interested in the esteemed fashion company. Given Ralph & Russo’s retail footprint in Doha and Dubai, and the presence of “Middle Eastern Royal families and ultra-high-net-worth individuals” in the region on its client list, Arabian Business stated in April that “it is not surprising that much of the lead interest in acquiring the company is coming from the Middle East.”
Meanwhile, Bloomberg reported that prospective buyers were likely to include “rival fashion houses, sovereign wealth funds, private equity firms and ultra-rich individuals.” Presumably not on the obvious list of acquirers: REV, the now-owner of a number of troubled American retail names, such as Pier 1, Stein Mart, and Radio Shack.
Speaking to REV’s plans for the 15-year-old fashion brand, the firm’s Executive Chairman Tai Lopez asserted that Ralph & Russo – which generated revenues of 15.2 million pounds and a loss of 14.8 million pounds for the fiscal year ending on March 31, 2019 – is a “globally celebrated brand with a unique position in the luxury sector and significant brand affinity.” With REV’s investment, he says that “there is massive potential” for Ralph & Russo “to retain and grow its market leading position at the forefront of luxury design.”
Founded in London in 2006 by Tamara Ralph and Michael Russo, Ralph & Russo swiftly transitioned from a two-person-shop to a globally recognized couture-maker and the first British fashion house to be invited to take part in the Paris couture shows in a century. “We had a few very high-profile private clients right from the start and these few ladies spoke very highly of the work to their friends and it grew very quickly,” Ms. Ralph told Blouin ArtInfo in 2015. One such early supporter: Actress Angelina Jolie, who “started to wear some of their designs at important events, including her visit to Buckingham Palace to receive an honorary damehood from the Queen.” Fast forward and Ms. Ralph and Mr. Russo, a former couple, had amassed a stunning roster of private clients, including, of course, Meghan Markle, who wore one of the brand’s dresses for her official engagement photos in 2017.
The burgeoning young company’s grand expansion plan – which included a partially-completed plan to expand beyond its two appointment-only maisons in London and Paris to retail stores in Doha, Miami, New York, Monte Carlo, Malaysia, Hong Kong, Los Angeles, and Dubai – was ultimately cut short by the difficulties that came with the pandemic. Ms. Ralph revealed in March that “unprecedented trading conditions throughout the pandemic” had put a “tremendous strain” on the business, which was best known for its eye-wateringly expensive custom creations but has since expanded into ready-to-wear offerings, as well as shoes, handbags, and other accessories, which the company sells by way of its e-commerce site, as well as retail stockists like Saks, Net-a-Porter, and Moda Operandi.
Legal issues have also plagued the brand, which was named in a commercial lawsuit in a United Kingdom High Court early this year by Nick Candy’s firm Candy Ventures. The case centered on the terms of a 17 million pound ($23.4 million) investment in connection with which Candy took a minority stake in the brand.
While Paul Appleton of Begbies Traynor Group, who acted as a Joint Administrator for Ralph & Russo, stated this spring that “the creative genius of Tamara Ralph gives this business the potential to be the next Chanel,” reports suggest that the brand’s founders – who are not cited or mentioned by name in REV’s acquisition announcement – will have little (if any) role going forward. Given that REV prides itself on “transform[ing] well-known undervalued retail brands into e-commerce success stories,” the future for Ralph & Russo will almost certainly be look quite a bit different than it did before. In light of REV’s lack of experience in the high fashion space, and without Ms. Ralph’s and Mr. Russo’s involvement going froward, the focus will almost certainly be on the brand’s more accessible offerings and offered up in a digital capacity, making is safe to assume that its reign as a purveyor of couture is coming to a close.
Share
