River Island allowed to close outlets to stave off collapse

River Island has been given the inexperienced gentle to shut 33 shops throughout the UK after the Excessive Court docket accepted the style retailer’s restructuring plans.

The Excessive Avenue model mentioned a buyer shift in the direction of on-line buying and better working prices had contributed to multi-million pound losses.

It had warned its collectors that it might run wanting money by the tip of August if its turnaround proposal was not accepted.

In addition to closing outlets, rents shall be diminished at an additional 71 branches as a part of the plan which, River Island’s chief govt Ben Lewis, mentioned “will allow us to align our retailer property to our prospects’ wants”.

Negotiations are on account of start with these landlords shortly.

In addition to the shop closures and lease reductions, about 110 of roughly 950 roles at River Island’s head workplace shall be made redundant, saving an estimated £8.1m.

The retailer has already closed seven loss-making outlets this yr, River Island’s barrister Matthew Weaver KC advised the Excessive Court docket.

He mentioned that except the restructure was accepted, the choice was insolvency.

Mr Lewis mentioned the corporate has a “clear transformation technique” to make sure the enterprise has a future, “and this choice offers us a robust platform to ship this”.

Charles Allen, an intelligence analyst at Bloomberg, mentioned River Island had been affected by points felt by many UK retailers, such because the shift to on-line buying.

“There’s simply much less enterprise getting in outlets,” he advised BBC’s Right now programme. He added that rising prices have additionally been exacerbated by the rise in employer Nationwide Insurance coverage Contributions.

Initially identified in Chelsea Lady, it was rebranded in 1988 as River Island and grew steadily, however lately has skilled declining gross sales, Mr Weaver mentioned.

The restructuring will contain closing 33 shops from January 2026, and negotiating with the landlords of an additional 71 shops to scale back rents in some circumstances to zero.

Mr Weaver acknowledge that in some circumstances, landlords might choose to regain store area earlier than the tip of leases.

With the restructure, the corporate is forecasting 1% annual development for the following 5 years.