River Island is set to close 33 stores across the UK, including its Somerset branch on Taunton’s North Street, after receiving court approval for a significant restructuring plan. The closures also impact branches in the West Country, including locations in Devon, Dorset, and Gloucestershire.
On August 8, a High Court judge sanctioned the London-based fashion retailer’s rescue plan designed to prevent the company from entering administration. As part of the plan, River Island will also secure reduced rents on 71 other stores to alleviate financial pressures.
Represented by lawyer Matthew Weaver KC, River Island acknowledged its inability to reverse ongoing financial difficulties amid a challenging retail environment. “Declining footfall and sales, intensified competition, and a shift towards online shopping have all contributed to the company’s struggles,” Weaver explained. He also cited additional challenges such as supply chain disruptions and rising costs in energy, labor, and other areas, which have made the company’s current cost base unsustainable.
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The restructuring includes a proposal for landlords to cut rents for three years, with some sites potentially being granted full rent suspensions to stem losses. Following creditor meetings held on August 1, where five out of ten creditor classes approved the plan, the company sought and obtained High Court approval to proceed.
No opposition emerged during the court hearing. Weaver warned that, without approval, River Island would likely enter insolvency, leading to the sale of stock, brand assets, and intellectual property. The retailer faces an anticipated inability to meet its debts by late August or early September, with a projected funding shortfall exceeding £43 million. To restore financial health, River Island is pursuing £54 million in new funding.
Currently, River Island operates 223 stores across the UK and Ireland, with no closures planned for its Irish locations. Weaver noted concerns regarding some landlord creditors potentially attempting to exploit the restructuring plan but emphasized that the plan’s goal is to tackle underlying issues and reposition the business for long-term success.
The transformation strategy combines operational improvements, cost rationalization, and strategic investment to restore profitability, enhance cash flow, and protect jobs. The plan received final approval from Sir Alastair Norris, though a written judgment is pending.
Founded in 1948 under the names Lewis and Chelsea Girl before rebranding as River Island in the 1980s, the company currently employs approximately 5,500 people.