Judge to decide fate of River Island after landlord rebellion
River Island is seeking to close 33 stores, cut rents on a further 71 shops and write off a series of debts, including business rates to councils, to get itself out of severe financial distress.
The retailer has warned it will essentially run out of money by the end of the month if unable to back out of those payments, as previously revealed by The Telegraph.
Around 80pc of River Island's creditors by value chose to support its plan, drawn up by advisers at PwC, during a vote held last Friday. It needed approval from at least three quarters of creditors to unlock an emergency loan from its own founders, the billionaire Lewis family.
However, the company did not secure 75pc of the vote in every individual class of creditor, with some landlords resisting the plans. There are 10 creditor categories, ranging from councils owed business rates to landlords. Store owners include British Land, the Crown Estate and Mike Ashley's Frasers Group.
Of the stores that River Island is not proposing to close, the company is aiming for three-year rent cuts of between 75pc and 25pc. The owners of 24 shops are asked to accept zero rental payments.
The plan will be put before the High Court on Thursday for a formal decision on whether to approve the restructuring.
A spokesman for River Island said: 'River Island circulated its proposals for a restructuring plan to creditors on June 20. 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 coming days.'
River Island employs 5,300 staff in its stores and another 950 at its headquarters in Hanger Lane, West London.
It blamed its liquidity crisis on 'a sharp rise in the cost of doing business over the last few years' and the shift to online shopping, burdening it with 'a large portfolio of stores that is no longer aligned to our customers' needs'.
Some landlords have expressed frustration at the fact that they face financial pain as a result of what they claim is the retailer's mismanagement.
'This is family-run, they've just overstretched, and it's unfair that the landlords will struggle because they haven't maintained their relevance,' one landlord, whose stores are unaffected, previously told The Telegraph.
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
15 minutes ago
- Yahoo
Those who invested in Castings (LON:CGS) five years ago are up 9.0%
Ideally, your overall portfolio should beat the market average. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long term Castings P.L.C. (LON:CGS) shareholders for doubting their decision to hold, with the stock down 23% over a half decade. On top of that, the share price is down 5.9% in the last week. However, this move may have been influenced by the broader market, which fell 2.6% in that time. Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During the five years over which the share price declined, Castings' earnings per share (EPS) dropped by 16% each year. The share price decline of 5% per year isn't as bad as the EPS decline. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here. What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Castings, it has a TSR of 9.0% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! A Different Perspective Investors in Castings had a tough year, with a total loss of 16% (including dividends), against a market gain of about 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 1.7%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Castings is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious... We will like Castings better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
15 minutes ago
- Yahoo
What Alexander Isak's agent said about transfer as Anfield rumors swirl
Alexander Isak's agent recently suggested that the Newcastle United forward is close to taking "the next step" in his career, and it was rumored that one of his representatives was at Anfield on Monday. Liverpool played a double-header against Athletic Bilbao on Monday, and the Reds won 4-1 and 3-2 with two different squads. The Anfield Wrap claimed that one of Isak's agents was at Anfield, sending social media into overdrive. Isak has expressed a desire to leave Newcastle this summer, but the club rejected Liverpool's $145 million offer. Newcastle has since sent an official bid worth $105 million to RB Leipzig for striker Benjamin Sesko, which has sparked mass speculation that Isak may join Liverpool. READ MORE: Harvey Elliott sees Liverpool exit option open up after nightmare injury blow READ MORE: Liverpool transfer news LIVE: Alexander Isak boost, Will Wright joins, Bilbao double action The 25-year-old is represented by Universal Twenty Two, and one of his agents, Gonzalo Gaitan, recently discussed his client and a potential transfer. "We are already studying and analyzing all options, and we may be close to finalizing the next step for the player," Gaitin said, via Saudi Arabian outlet Arriyadiyah. Isak helped Newcastle end a 70-year wait for silverware last season and scored in a 2-1 win over Liverpool in the League Cup Final. Despite achieving hero status, Isak expressed his desire to leave Newcastle in July. Newcastle was in talks with Eintracht Frankfurt striker Hugo Ekitike earlier this summer, with ambitious plans to partner him with Isak. However, Liverpool hijacked the move and signed Ekitike for an initial fee worth $92 million. Despite signing Ekitike, Liverpool then switched its attention to Isak. The striker missed Newcastle's preseason tour due to a reported thigh injury, but it's believed he's pushing to join Liverpool. After making a formal offer, Liverpool has yet to submit an improved bid for Isak. However, should Leipzig accept Newcastle's offer for Sesko, then a record bid could force the club to part ways with Isak. Due to uncertainty surrounding his future, Isak has been training alone since Liverpool's opening bid. Newcastle head coach Eddie Howe hasn't spoken to Isak since the offer was made, but sent him a clear message. After Newcastle's preseason tour in Asia ended, Howe condemned Isak's behavior and warned him that isolated training may continue once the squad returns to England. "You have to earn the right to train with us," Howe told the Daily Mail. "We are Newcastle United. The player has a responsibility here to be part of a team and part of a squad - you have to act in the right way. So that is also at play here. "We will make sure that any player does that to earn the right to train with the group. No player can expect to act poorly and train with the group as normal." Howe also distanced himself from the transfer saga because he focused on Newcastle's preseason tour. "Other people have been dealing with that situation back at home," he said.
Yahoo
15 minutes ago
- Yahoo
Corporate profits are slowing
Shares in American Eagle Outfitters rose nearly 24 per cent yesterday after President Donald Trump called the company's controversial Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
