River Island: Fashion retailer's rescue plan could put jobs and stores at risk
River Island is drawing up a rescue plan that could lead to store closures and job losses across the UK, according to Sky News.
The fashion retailer, which runs around 230 stores and employs approximately 5,500 people, has appointed advisers from PricewaterhouseCoopers (PwC) to develop a formal restructuring proposal. Sources told Sky News the plan is likely to be finalised within weeks, although no decisions have yet been made.
The move comes as the company faces significant financial pressures. According to its latest accounts, River Island Clothing Co reported a pre-tax loss of £33.2 million in the year ending December 30, 2023. During the same period, turnover fell by more than 19% to £578.1 million.
The restructuring process under consideration would allow River Island to compromise with creditors, such as landlords, under court supervision in a bid to avoid insolvency. Similar court-approved plans have been used by other struggling retailers, including Prezzo and Hobbycraft.
It is not yet clear how many jobs or stores could be affected. But in its recent filings with Companies House, River Island warned of mounting financial and operational risks due to shifting customer preferences, digital competition, and economic instability.
“The market for retailing of fashion clothing is fast changing with customer preferences for more diverse, convenient and speedier shopping journeys and with increasing competition especially in the digital space,” the company said.
“A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence.”
River Island had previously hired consulting firm AlixPartners to focus on cutting costs and boosting profits. That role has now been taken over by PwC.