River Island faces potential collapse pending approval of its rescue plan in the High Court scheduled for next week. The fashion retailer has disclosed intentions to shutter 33 stores and negotiate reduced rents for 71 additional branches, pending consent from creditors and landlords.
As per The Telegraph, River Island’s restructuring plan highlights a looming cash shortage by the end of August, potentially leading to insolvency or administration without the proposed measures. If the rescue plan is sanctioned, the company can secure an emergency loan from its founders, the Lewis family, to address a £10 million financial deficit.
A River Island representative stated that the company shared its Restructuring Plan proposals with creditors in June, aiming to strengthen its financial position in conjunction with the ongoing Transformation Strategy. Positive dialogues with key stakeholders have instilled confidence in achieving Plan approval shortly.
Notably, the proposed plan includes rent reductions ranging from 25% to 75% over 36 months for 38 stores, zero rent for 24 stores, and full rent payments for nine stores. About 97 stores out of the UK’s approximately 230 River Island outlets remain unaffected and will continue full rent payments.
With around 230 stores and 5,500 employees, River Island incurred a £33.2 million loss in 2023 due to a 19% sales decline. The retailer enlisted PwC advisors to manage the restructuring process amid evolving market dynamics.
River Island’s CEO, Ben Lewis, acknowledged the challenges posed by shifting consumer preferences towards online shopping and escalating operational costs. Emphasizing the importance of adapting to meet customer demands, Lewis outlined the strategic transformation efforts to ensure the company’s sustained profitability.
Pending approval of the rescue plan, certain stores are slated for closure by January 2026. Readers can receive exclusive money-saving tips and offers by subscribing to the Mirror Money newsletter.