River Island faces potential collapse pending High Court approval of its rescue plan next week. The retailer’s proposal involves shutting down 33 stores and renegotiating rents for 71 others, pending creditors’ and landlords’ consent.
Reported by The Telegraph, River Island’s formal restructuring plan warns of financial depletion by the end of August, leading to insolvency if the plan is not ratified. The company plans to receive emergency funding from its founders, the Lewis family, to bridge a £10 million financial gap.
A River Island spokesperson stated that the proposed Restructuring Plan, combined with the ongoing Transformation Strategy, aims to stabilize the company. Positive discussions with key stakeholders indicate confidence in plan approval soon.
The restructuring plan includes rent reductions ranging from 25% to 75% for 36 stores over 36 months, with 24 stores having zero rent and nine stores continuing full rent payments. Approximately 97 stores out of 230 in the UK are unaffected by the plan.
River Island, operating 230 stores and employing 5,500 individuals, suffered a £33.2 million loss in 2023 due to a 19% sales decline. PwC advisors have been engaged to oversee the restructuring process.
River Island’s CEO, Ben Lewis, acknowledged the business’s need for transformation amid changing consumer behavior and rising operational costs. He emphasized the importance of a restructuring plan to ensure long-term profitability, expressing regret over potential job losses due to store closures.
Pending approval, the rescue plan outlines store closures by January 2026. Stay updated on money-saving tips and offers with the Mirror Money newsletter.
