River Island owners draw up rescue plan for high street chain

The household down River Island, the precocious thoroughfare manner retailer, is drafting up a extremist rescue program which could enactment important numbers of stores and jobs astatine risk.

Sky News has learnt that the chain's owners person drafted successful advisers from PricewaterhouseCoopers (PwC) to devise a ceremonial restructuring plan.

The proposals, which are expected to beryllium finalised wrong weeks, are taxable to sign-off, with sources insisting this play that immoderate steadfast decisions astir the aboriginal of the concern person yet to beryllium taken.

River Island is 1 of Britain's best-known covering chains, operating astir 230 stores crossed the country, and employing astir 5,500 people.

Previously named Lewis and Chelsea Girl, the concern was founded successful 1948 by Bernard Lewis, yet adopting its existent marque 4 decades later.

Accounts for River Island Clothing Co for the 52 weeks ending 30 December, 2023 amusement the institution made a £33.2m pre-tax loss.

Turnover during the twelvemonth fell by much than 19% to £578.1m.

A restructuring program is simply a court-supervised process which enables companies facing fiscal difficulties to compromise creditors specified arsenic landlords successful bid to debar insolvency proceedings.

In caller years, it has been utilized by companies including the casual eating concatenation Prezzo and, much recently, Hobbycraft, the retailer present owned by Modella Capital.

One root said that if it proceeded a restructuring program astatine River Island could look wrong weeks.

This weekend, it was unclear however galore stores and jobs mightiness beryllium nether menace from a ceremonial rescue deal.

In its latest accounts astatine Companies House, River Island Holdings Limited warned of a multitude of fiscal and operational risks to its business.

"The marketplace for retailing of manner covering is accelerated changing with lawsuit preferences for much diverse, convenient and speedier buying journeys and with expanding contention particularly successful the integer space," it said.

"The cardinal concern risks for the radical are the pressures of a highly competitory and changing retail situation combined with accrued economical uncertainty.

"A fig of geopolitical events person resulted successful continuing proviso concatenation disruption arsenic good arsenic energy, labour and nutrient terms increases, driving ostentation and involvement rates higher and resulting successful weaker disposable income and little user confidence."

In January, Sky News reported that River Island had hired AlixPartners, the consulting firm, to undertake enactment connected outgo reductions and nett improvement.

AlixPartners' relation is present understood to person been superseded by that of PwC.

Retailers person complained bitterly astir the interaction of taxation changes announced by Rachel Reeves, the chancellor, successful past autumn's Budget.

Since then, a clump of well-known chains, including Lakeland and The Original Factory Shop, person been forced to question caller owners.

Poundland, the discount retail giant, is successful the second stages of an auction process, with Hilco Capital and Gordon Brothers remaining funny successful acquiring it.

A spokesperson for River Island declined to comment.