A huge fashion brand that is a high street staple across the UK is putting dozens of stores and thousands of jobs at risk as desperate bosses rush to draw up a rescue plan for the struggling firm.
The clothing retailer, which has 230 shops and employs around 5,500 people, is taking the step after latest figures showed it suffered a £32.2 million loss in 2023.
River Island has now called in advisers from PricewaterhouseCoopers (PwC) to devise a formal restructuring plan to stop the business going bust.
Proposals for a rescue plan are set to be finalised within weeks, Sky reports, although sources at the company say any key decisions about its future are yet to be taken.
River Island was originally named Lewis and Chelsea Girl after being founded in 1948 by Bernard Lewis, before changing its brand name four decades later.
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.
In January, the firm introduced a redundancy programme at its London head office in a bid to save money in the context of increasingly pressured finances.
The clothing retailer, which has 230 shops and employs around 5,500 people, is taking the step after latest figures showed it suffered a £32.2 million loss in 2023
Company accounts showed the company was £33.2 million in the red for the 12 months to December 30, 2023 (pictured: CEO Ben Lewis)
The job cuts affected a range of employees across buying, merchandising and HR, but the total number of losses was not confirmed by the retailer.
Company accounts showed the company was £33.2 million in the red for the 12 months to December 30, 2023.
It also suffered a 15 percent decline in sales and a 19 percent fall in turnover.
The year before, River Island had a total profit of £7.5 million.
Any restructuring plan will be a court-supervised process that enables a company facing financial difficulties to compromise creditors such as landlords to avoid going bust.
It is currently unknown how many stores and jobs would be at risk under the plan.
In its latest accounts on Companies House, River Island Holdings Limited said: ‘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 key business risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty.
‘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.’
