Huge fashion retailer with over 250 UK stores ‘drawing up radical rescue plan' with shops and jobs at risk
A HUGE fashion retailer with over 250 UK stores is reportedly drawing up a radical rescue plan which could see shops and jobs axed.
The high street giant - which is being forced to restructure due to tough trading standards - employs around 5,500 people and was founded in London in 1948.
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The chain's owners have brought in advisers from PricewaterhouseCoopers (PwC) to come up with money-saving solutions, reports Sky News.
The proposals are expected to be finalised in a matter of weeks, though sources have reportedly claimed no decisions have been green lit on the retailer's future.
Accounts for River Island Clothing Co for the year ending December 30 2023 showed the firm made a £33.2 million pre-tax loss.
Then the turnover during the following 12 months fell by more than 19% to £578.1 million.
The firm's latest accounts at Companies House, warned of growing financial and operational risks.
"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," it said.
"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."
In January, River Island hired consulting firm, AlixPartners, to undertake work on cost reductions and profit improvement.
It's understood PwC has now taken over.
Why are so many pubs and bars closing?
In recent months, a number of River Island stores have been closing, including in Corby and Chesterfield.
Originally named Lewis Separates and then Chelsea Girl, the chain was founded by Bernard Lewis in 1948 and became influential during the 1960s fashion scene, including the iconic mini-dress trend.
It was re-branded as River Island in 1988 and throughout the next two decades expanded to become a leading high street force in the UK.
It now has a presence in over 125 worldwide markets, in stores and online.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre's decline.
The Sun's business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open.
The British Retail Consortium has predicted that the Treasury's hike to employer NICs from April 2025, will cost the retail sector £2.3billion.
At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
In some cases, stores have been shut when a retailer goes bust, as in the case of Carpetright, Debenhams, Dorothy Perkins, Paperchase, Ted Baker, The Body Shop, Topshop and Wilko to name a few.
What's increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.
The Centre for Retail Research (CRR) has warned that around 17,350 retail sites are expected to shut down this year.
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