At 18.35 hours on 7 July 1942 the Hartlebury (Master George Willbourne Stephenson), dispersed from convoy PQ-17, was hit by two of three torpedoes fired by U-355 and two minutes later by another torpedo. At 18.45 hours, a coup de grâce hit the vessel, which sank over the bow within 10 minutes 17 miles 180° from Britwin Lighthouse, Novaya Zemlya.

Six mess attendants had been killed by the first torpedoes and the master had to be freed underneath a piece of debris. The explosions only left one lifeboat intact, which was lowered by panicking crewmen and flipped over, throwing the occupants into the icy water. Others jumped into the water and tried to reach the rafts. A total of 29 crew members, seven gunners and two naval signalmen were lost. The master and 12 survivors landed at Pomorski Bay, Novaya Zemlya. Seven survivors made it to the American merchant Winston-Salem aground at North Gusini Shoal, Novaya Zemlya, were rescued by a Soviet survey ship and transferred to the British merchant Empire Tide at anchor in Pomorski Bay. All survivors were later transferred to HMS La Malouine (K 46) (Lt V.D.H. Bidwell) and landed at Archangel on 25 July.

The master, George Willbourne Stephenson, survived the sinking but died of a head trauma within a year.