A high street fashion giant has revealed it will close 33 stores – putting hundreds of jobs in danger.
Major chain River Island announced the shutdowns as part of a part of a ‘restructuring plan’ aimed at staving off going into administration.
The clothing retailer will also now pay reduced rents on 71 further outlets.
The plans have now been approved by London’s High Court, where Matthew Weaver KC, representing River Island, told how the firm had ‘simply not been able to reverse’ its ongoing financial struggles.
The sweeping proposals have been put together by accountancy firm PwC, which is advising the retailer.
An 800-page report compiled by PwC revealed how the fashion house facing a £10million ‘funding need’ in the second week of September, which financial experts warn will skyrocket to £50million before Christmas.
The plan would allow River Island to walk away from a string of debts, including tens of millions of pounds owed to landlords from outstanding debts.
Among those landlord affected by the restructuring deal are British Land, the Crown Estate and Mike Ashley’s Frasers Groups.
High street fashion chain River Island is planning to shut 33 stores, with 71 more at risk, putting thousands of jobs on the line. Pictured: file image
River Island had reportedly faced collapse in weeks without a rescue deal being approved
Councils nationwide would also be on the list.
Bosses at the company have blamed the proposed closures on a ‘migration of shoppers from the High Street to online’ and higher costs to run stores.
River Island, which employs around 5,500 people, was founded in 1948 under the Lewis and Chelsea Girl brand before rebranding in the 1980s.
It is now headed up by CEO Ben Lewis, the nephew of its founder, who took over his second stint as the head of the family firm in February.
He previously held the position for almost a decade before stepping down in 2019.
Ben Lewis, chief executive of River Island, previously said: ‘River Island is a much-loved retailer, with a decades-long history on the British High Street.
‘However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers’ needs.
‘The sharp rise in the cost of doing business over the last few years has only added to the financial burden.
‘We have a clear strategy to transform the business to ensure its long-term viability.
‘Recent improvements in our fashion offer and in-store shopping experience are already showing very positive results, but it is only with a restructuring plan that we will be able to see this strategy through and secure River Island’s future as a profitable retail business.
‘We regret any job losses as a result of store closures, and we will try to keep these to a minimum.’
The high street giant is among several fashion chains hit hard by weaker consumer spending and fierce competition from cheaper online rivals like Shein.
In its latest accounts, River Island reported a £33.2million loss for 2023, with sales down 19 per cent.
A River Island spokesman told the Daily Mail last month: ‘River Island circulated its proposals for a Restructuring Plan to creditors on June 20.
‘In combination with the company’s ongoing transformation strategy, the plan is a proactive measure to place the company on a firm footing.
‘We have been having positive conversations with key stakeholders and are confident that we will achieve approval of the Plan in the next few weeks.’
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