River Island’s future hangs in the balance pending approval of its rescue plan in the upcoming High Court session. The fashion chain is aiming to shut down 33 stores and renegotiate rents for 71 other locations, pending creditor and landlord consent.
Reports indicate that without the restructuring plan’s approval, River Island may face insolvency by the end of August, with a potential administration looming. However, if the rescue plan is greenlit, the retailer can secure an emergency loan from its founders, the Lewis family, to bridge a £10 million funding shortfall.
A River Island spokesperson stated that the proposed Restructuring Plan, combined with the ongoing Transformation Strategy, is a proactive step to stabilize the company. Positive discussions with key stakeholders have taken place, fostering confidence in the plan’s eventual approval.
Under the plan, rent reductions ranging from 25% to 75% for 36 months are proposed for 38 stores, with 24 stores slated for rent reductions to zero. Nine stores are expected to maintain full rent payments, while 97 stores remain unaffected by the restructuring.
With approximately 230 stores and 5,500 employees, River Island incurred a £33.2 million loss in 2023 due to a 19% sales decline. The retailer has enlisted PwC advisors to manage the restructuring process amid shifting consumer preferences towards online shopping.
CEO Ben Lewis acknowledged the challenges faced by the company, citing the evolving retail landscape and rising operational costs. He outlined a strategy to adapt the business model for long-term sustainability, emphasizing recent improvements in product offerings and store experiences.
While store closures may lead to job losses, River Island aims to minimize the impact on its workforce. The impending approval of the rescue plan could result in the closure of specified stores by January 2026, marking a pivotal moment for the retailer’s future.