Ralph & Russo, the British couture fashion brand which has secured the backing of some of Britain’s wealthiest investors, has deferred salary payments to employees, raising doubts about the state of its finances.
Sky News understands that Ralph & Russo informed some staff last month that it could not pay them after seeing sales slump during the coronavirus pandemic.
The business, which was founded in 2010 by creative director Tamara Ralph and her then-boyfriend, Michael Russo, has received tens of millions of pounds in funding from the likes of Candy Ventures, the investment vehicle of property developer Nick Candy, and John Caudwell, the billionaire founder of Phones 4U.
Tennor Holding, the owner of the La Perla lingerie brand and investment vehicle of financier Lars Windhorst, invested $ 50m for a minority stake in Ralph & Russo in 2019.
Ralph & Russo sprang to international prominence in 2017 when the Duchess of Sussex – then Meghan Markle – wore one of the designer’s dresses in her engagement photographs.
It employs roughly 100 people and is based in a 19th century townhouse in Mayfair, central London.
However, it is now said to be facing a financial squeeze exacerbated by diminished revenues during the last year, as well as a legal claim served recently by Mr Candy, whose business is Ralph & Russo’s biggest secured creditor.
One industry insider suggested the business may need additional funding in the near term .
A source close to Ralph & Russo said on Saturday that the pandemic had been “bad for business” but insisted that trade was “beginning to revive” and said demand for the brand was “strong”.
They acknowledged that “a small proportion of staff payments for February” had been deferred but said the payments were scheduled to be made “very shortly”.
All outstanding orders would be fulfilled, added the source.
The company declined to comment.