With a clientele that reads like a who’s who of A-listers, assorted members of international royalty and VIPs, Ralph & Russo’s status in the hallowed ranks of high fashion is well established.
A relative newcomer to the esteemed coterie of fashion labels qualifying as genuine haute couture, it was the first British brand in almost a century to be accepted into the French regulatory body, the Chambre Syndicale de la Haute Couture, in 2014.
But it was a single moment in December 2017 that shot the brand to wider public prominence — that, of course, being the moment Meghan Markle donned a diaphanous, long-sleeved gown reportedly costing a huge £56,000 for photographs to mark her engagement to Prince Harry.
It was an occasion filled, on many levels, with so much promise. A fairytale gown (designer Tamara Ralph’s forte) fit for a princess and a brand with a fairy tale of its own: a fourth generation couturier with a dream that took her from a single sewing machine to co-founder of a fashion powerhouse.
It was a single moment in December 2017 that shot the brand to wider public prominence — that, of course, being the moment Meghan Markle donned a diaphanous, long-sleeved gown reportedly costing a huge £56,000 for photographs to mark her engagement to Prince Harry (pictured)
But fast forward four years and Ralph & Russo’s fortunes have spectacularly collapsed. Yesterday the luxury brand was placed into administration — a decision, the company insisted, that was taken ‘in order to assist in the restructuring of the business’ in the wake of the financial downturn caused by the global pandemic. It added that it had ‘experienced unprecedented trading conditions throughout the pandemic which has put a tremendous strain on our business and retailers across the world’.
In fairy tales, of course, a knight often rides to the rescue, but it’s unclear who that might be for Ralph & Russo, which has already had millions of pounds of investment from Phones 4U billionaire John Caudwell, real estate mogul Nick Candy and a £40 million boost from Tennor Holding, the owner of the La Perla lingerie brand and investment vehicle of financier Lars Windhorst.
So what went wrong for the brand beloved by the likes of Jodie Comer, Eleanor Tomlinson, Princess Beatrice, Amal Clooney, Gwyneth Paltrow and Beyonce? Set up by Tamara and financial consultant Michael Russo in 2007, like so many other firms it had been facing the inevitable repercussions of a year in which weddings have been cancelled and the red carpet left to gather dust in the wake of Covid-19.
At the start of the pandemic the company was effectively forced to mothball its London workshop and put much of its staff on furlough. Orders, unsurprisingly, dwindled.
£11,750: So what went wrong for the brand beloved by the likes of Jodie Comer, Eleanor Tomlinson, Princess Beatrice, Amal Clooney, Gwyneth Paltrow and Beyonce? Pictured: Jodie Comer
The extent of its financial woes was laid bare when it emerged that those still at work did not receive their full wages last month, with the company unable to make scheduled contributions to pension pots. At one time the brand was said to employ more skilled artisans than Chanel or Dior. Yet several sources have claimed to the Mail that staff turnover has been growing since before the pandemic.
While some staff were furloughed early in the epidemic, with more in recent months, others, it is claimed, were ‘let go’ or chose to leave. An indication, perhaps, of wider discontent?
Certainly current and former staff members have told us they would be unimpressed if the brand’s collapse was blamed solely on the pandemic, with tales of bailiffs at the doors even before Covid, not to mention several County Court judgments over their finances, more of which later.
As if one financial struggle was not enough, the company is being sued — for the second time in a year — by one of its own investors, Candy Ventures, an investment company belonging to Nick Candy, whose wife Holly wore a pink Ralph & Russo ensemble to Meghan’s wedding.
£10,500: Set up by Tamara and financial consultant Michael Russo in 2007, like so many other firms it had been facing the inevitable repercussions of a year in which weddings have been cancelled and the red carpet left to gather dust in the wake of Covid-19. Pictured: Eleanor Tomlinson
Or perhaps that should be was being sued. For that legal action now appears likely to be superseded by the events of yesterday, which leaves Candy Ventures, in its words, ‘the principle secured creditor’. Details of the suit, filed in the High Court earlier this year, have not been made public. But it is understood to revolve around the disputed terms of a £17 million loan. Candy Ventures put £10 million into the company in May 2018, then £7 million five months later in a ‘convertible loan’ with an eye-watering interest rate of 13.5 per cent.
Companies House records reveal that Candy Ventures secured the loan with a charge over Ralph & Russo’s assets in May 2018 and January 2019, around the time of their investment, moves that meant the brand stood as security for Candy’s loan and could have effectively given the developer the right to the fashion house’s assets, if it failed to make repayments.
Sources had indicated the two firms were hopeful of reaching an amicable resolution, though one observer did remark that there was a ‘pistols at dawn’ element to proceedings.
Last night, a spokesman for Candy Ventures Sarl said: ‘As the principal secured creditor, it has become clear to Candy Ventures Sarl that Ralph & Russo was not being run properly as a business. In spite of this, the creative director Tamara Ralph has continued to produce work of the highest quality with her great creative team.
£12,000: At the start of the pandemic the company was effectively forced to mothball its London workshop and put much of its staff on furlough. Orders, unsurprisingly, dwindled. Pictured: Penelope Cruz
‘It is now our aim to have the business operations match the quality of the design work that has made this firm a global brand.’
It’s all a dramatic reverse of fortunes for a brand that once had such promise. Tamara began sewing when she was just a little girl, growing up in Sydney, where both her mother and grandmother were couturiers for society ladies. By 15, she had her own clients.
It was a holiday that brought the ever-impeccably glamorous blonde to London where, story has it, she bumped into financial consultant Michael Russo, a fellow Aussie, four hours into her very first day.
They fell in love, began a long-distance relationship and a year later he rang up and said he’d bought her a flight to London — and a sewing machine.
£25,000: At one time the brand was said to employ more skilled artisans than Chanel or Dior. Yet several sources have claimed to the Mail that staff turnover has been growing since before the pandemic. Pictured: Alice Eve
And so the Ralph & Russo story, both personal and business, began.
They started by putting in £200, and their reputation grew by word of mouth. The brand was created in 2007, though they say it officially began in 2010. Tamara’s gorgeous designs rapidly attracted a celebrity following. Since their creation they’ve fashioned tour costumes for Beyonce, an Oscars gown for Gwyneth Paltrow and one of Ellie Goulding’s wedding dresses. By 2013, the couple landed on Fortune’s 40 Under 40 list, the only representatives from fashion.
They sold a minority, non-controlling stake to Caudwell in 2014, and continued their meteoric rise, lauded as the changing face of luxury fashion in a world dominated by the ‘old guard’.
Russo boasted to the Financial Times in 2016 that the company was ‘a profitable business from the start.’
£30,000: Certainly current and former staff members have told us they would be unimpressed if the brand’s collapse was blamed solely on the pandemic, with tales of bailiffs at the doors even before Covid, not to mention several County Court judgments over their finances. Pictured: Phoebe Waller-Bridge
In 2017, he spoke of revenues ‘into the billions’ in the next five years and of up to 15 flagship stores around the world within a year.
At a lavish Paris Fashion Week party thrown by the firm, U.S. singer Ne-Yo performed, while the decor featured £48,000 of giant sculptures, trees and mirrors.
Its ready-to-wear collection launched in 2018, including a £595 pair of trainers, and in 2019 the company was valued at £175 million. The administration has arisen less than two years since the company landed the £40 million investment from Tennor Holding.
Tennor took a minority stake in the business; at the time Russo, the finance brains of the partnership, said it would help the brand ‘realise our long-term growth plans’.
£20,000: As if one financial struggle was not enough, the company is being sued — for the second time in a year — by one of its own investors, Candy Ventures, an investment company belonging to Nick Candy, whose wife Holly wore a pink Ralph & Russo ensemble to Meghan’s wedding. Pictured: Amber Heard
Among some unhappy former and current employees there was disquiet this week that the plight of the company might be put down solely to the pandemic. ‘That’s just not the case,’ said one former employee. ‘The company may say that they were in amazing shape until the pandemic, but anyone who has worked there knows that is absolutely not the case. But for La Perla investing, I think they would have closed in 2019.’
In a scathing critique, the former employee described the brand as ‘all smoke and mirrors, beautiful on the outside, ugly on the inside’. Another former employee claimed that as the 2019 haute couture Paris shows were unfolding, assembled seamstresses and staff were at the company’s French ‘maison’, where show preparations were underway, when bailiffs arrived. ‘Then they got the investment,’ he said.
We were given several accounts of the company failing to pay suppliers on time, falling out with partners running franchise stores by delivering stock late and struggles to pay the delivery firms taking couture creations — six months in the planning — to clients.
Another more recent staff member adds: ‘Before the La Perla investment, I know of people they stopped paying. With others, they would be three or four days late paying, which was causing problems when people have bills to pay. There would be calls from suppliers because management was not replying to them.’ The employee also claimed that staff turnover was unusually high, saying ‘every month, there would be multiple people leaving’. Ralph & Russo did not respond to requests to comment on these claims.
Tamara (pictured) began sewing when she was just a little girl, growing up in Sydney, where both her mother and grandmother were couturiers for society ladies. By 15, she had her own clients
As for late payments, the brand has clocked up eight County Court judgments against it since January 2018, totalling £137,000, one of which (for £24,471) dates from February 2021 and has yet to be paid. In December, the company was locked in another wrangle with events firm Banana Split over an outstanding £70,000 bill (part of a £162,000 total bill) for the aforementioned Paris Fashion Week party.
Ralph & Russo failed to respond to the claim in the specified time so Banana Split was granted the judgment in default — but then withdrew the case and said the matter had been ‘resolved’.
The last company accounts, for the financial year ending March 2019, show that while sales rose seven per cent to £15.2 million, there was still a £14.8 million loss before tax. Losses the previous year were £12.3 million. The accounts also show that just £3.8 million of sales were in the UK.
As directors, Ralph and Russo each took pay of £225,000 in 2018 and 2019. But between them, they also borrowed £375,000 from the company.
The brand attempted to move through the pandemic by embracing technology, using virtual reality headsets to showcase its spring 2021 ready-to-wear collection. But in a sign of what was to come, in January it opted to sit out the spring 2021 season.
Though Tamara and Michael were at one point engaged, they went on to quietly end their relationship. On January 28, Tamara gave birth to her daughter Haliya with her new partner, businessman Bhanu Choudhrie, 42.
After the administration was announced, Tamara wrote: ‘I am eternally thankful for those who have been there for me and supported the brand over the years and I will endeavour with all my heart to move through this period positively and to take the business forward to secure the future of the brand for my staff and my clients.
‘The brand I created was only the start, and as this new chapter opens, I move into this period with positivity and strength knowing that this is only the beginning of something new.’
Uplifting words, perhaps. But it’s certainly a dismal end to this chapter of this fairy tale.
Additional reporting: Tim Stewart