River Island ‘on brink of collapse’ in weeks with 33 stores facing closure

River Island, the fashion brand known for deep V-necks and Rihanna t-shirts, could collapse for good in the latest blow to the UK high street.

The debt-riddled chain could run out of money by August if plans to shut 33 stores and slash rents on 71 are not approved by the High Court.

The shops would have the shutters pulled on them in January, including branches in Gloucester, Beckton and Hereford.

If rejected, the company would be ‘unable to pay its debts as they fall due’ and ‘will not be able to continue trading as a going concern’.

River Island told creditors the company ‘would be subject to administration or other insolvency proceedings’, according to The Telegraph.

But if the three quarters of the retailer’s creditors give the troubled brand’s plans the green light, it will be offered a loan from River Island’s billionaire founders, the Lewis family, to pay its bills.

River Island’s advisers, PwC, said in an 800-page restructuring plan that three-year rent cuts of between 75% and 25% for the remaining branches are being considered.

Landlords of shops not facing closure will be asked to accept zero rental payments.

River Island, which employs 5,300 staff in its stores and head office in west London, has struggled as online shopping booms and the cost of living crisis continues.

The company made a £33.2million pre-tax loss in the year ending December 30, 2023, according to a strategic report.

Fierce competition in an industry dominated by fast-fashion chains, supply chain issues caused by the Russia-Ukraine war and ‘evolving threats to cybersecurity’ were cited as the main risks River Island faces.

Many other fashion chains have also taken a beating in recent years, including Ted Baker, Topshop and New Look.

Other high street giants, such as Poundland and Santander, have handed the keys back to dozens of their stores.

And they won’t be the last, with the Centre for Retail Research predicting that more than 17,000 shops will close this year, up from 13,500 in 2024.

A River Island spokesperson confirmed it gave a restructuring plan to creditors on June 20.

They said: ‘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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