River Island on brink of collapsing into administration
The London-based company has laid out a major rescue plan which will see it shut 33 stores and pay reduced rents on a further 71 shops.
River Island has asked landlords to cut rents for three years and potentially stop payments completely on some sites in a bid to stem losses.
River Island is on the brink of collapsing into administration
The plan, which will also see it write off parts of its heavy debt pile, will need court approval next month.
River Island will need the backing of 75% of the group's creditors, predominantly landlords, at a hearing on August 7.
The company said talks with creditors have been positive and it expects to gain approval for the restructuring plan.
However, company documents first reported by the Telegraph warned that the company will be 'unable to pay its debts' by the end of the month if the plan is rejected.
It indicated that the company will not be able to keep trading if it fails on these payments and would therefore 'be subject to administration or other insolvency proceedings'.
The documents also highlighted that the company faces a £10 million 'funding need' in September, which could balloon to £50 million by next year.
A River Island spokeswoman said: 'River Island circulated its proposals for a restructuring plan to creditors on June 20.
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'In combination with the company's ongoing transformation strategy, the plan is a proactive measure to place the company on a firm footing.
'We have been having positive conversations with key stakeholders and are confident that we will achieve approval of the plan in the next few weeks.'
River Island employs around 5,500 people and was founded in 1948 under the Lewis and Chelsea Girl brand before being renamed in the 1980s.
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