River Island faces potential collapse pending approval of its rescue plan in the High Court next week. The fashion retailer has disclosed intentions to shut down 33 stores and renegotiate rents for 71 other locations, pending consent from creditors and landlords.
A report by The Telegraph indicates that River Island’s restructuring plan warns of imminent financial depletion by the end of August, leading to potential insolvency if not approved. The company seeks to bridge a £10 million funding gap through an emergency loan from its founders, the Lewis family.
A spokesperson for River Island has emphasized proactive measures to stabilize the company, highlighting ongoing positive discussions with stakeholders in anticipation of plan approval. The proposed restructuring involves rent reductions of 25% to 75% for 38 stores over 36 months, zero rent for 24 stores, and full rent for nine stores.
With approximately 230 stores and 5,500 employees, River Island aims to adapt to changing retail landscapes and secure long-term viability amid financial challenges. Chief Executive Ben Lewis acknowledges the shift towards online shopping and the need for strategic transformation to align with customer preferences and ensure profitability.