River Island set to close 33 branches with another 71 at risk
River Island set to close 33 branches with another 71 at risk
The High Street fashion brand is working on a restructuring plan
Shoppers walk in front of River Island Fashion Store on Bow Street
River Island is planning to close 33 shops as part of a restructuring plan, reducing its chain to fewer than 200. Sky News reports that the fate of 71 more branches will also depend on negotiating lower rent with landlords.
The company, founded in 1948, is working with PricewaterhouseCoopers (PwC) on a restructuring plan. Ben Lewis, River Island's chief executive, said: "River Island is a much-loved retailer, with a decades-long history on the British high street. However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers' needs.
"The sharp rise in the cost of doing business over the last few years has only added to the financial burden. We have a clear strategy to transform the business to ensure its long-term viability.
"Recent improvements in our fashion offer and in-store shopping experience are already showing very positive results, but it is only with a restructuring plan that we will be able to see this strategy through and secure River Island's future as a profitable retail business. We regret any job losses as a result of store closures, and we will try to keep these to a minimum."
River Island employs around 5,500 people. Its annual report in 2023 showed the company made a loss of £33.2million. Its latest report read: "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.
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"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."
The retailer was founded under the Lewis and Chelsea Girl brand before being renamed in the 1980s. The proposals are set to go to a vote by the firm's creditors – companies or individuals owed money by the retailer – in August.
The deal is expected to result in fresh funding being invested into the business in order to help fuel its turnaround. It is among high street fashion chains to have been impacted by weaker consumer spending and competition from cheaper online rivals, such as Shein.
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River Islandsales slid by 19% in 2023, according to its most recent set of accounts.
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