UK store plans rescue strategy to avoid closure, job losses
The founding family of River Island is preparing a significant rescue plan that may result in numerous store closures and job reductions.
Sky News reported that the UK fashion retailer has engaged consultants from PricewaterhouseCoopers to assist in developing a formal restructuring strategy.
The plans, expected to be finalized in the upcoming weeks, are still pending final approval, with insiders indicating that no definitive decisions have been reached regarding the company's future.
River Island ranks among the UK's most prominent fashion retailers, operating about 230 locations nationwide and employing approximately 5,500 individuals.
Initially called Lewis and later Chelsea Girl, the company was established in 1948 by Bernard Lewis, adopting the River Island brand name nearly four decades later.
As per its financial documents for the 52 weeks ending 30 December 2023, River Island Clothing Co reported a pre-tax deficit of £33.2 million.
A restructuring plan is a court-monitored process that allows financially troubled businesses to negotiate with creditors, such as landlords, to avoid formal insolvency proceedings.
A source mentioned that if accepted, River Island's restructuring plan could be revealed in the next few weeks.
As of the past weekend, the potential scale of store closures and job cuts under the suggested rescue initiative remained uncertain.
In its latest submissions to Companies House, River Island Holdings Limited pointed out various financial and operational risks confronting the company.
“The primary business challenges for the group include the pressures of a highly competitive and evolving retail landscape alongside increasing economic uncertainty.
“Several geopolitical events have led to ongoing supply chain disruptions along with rising energy, labor, and food costs, which are increasing inflation and interest rates, resulting in diminished disposable income and lower consumer confidence.”
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