Retailer with Glasgow Silverburn store on 'brink of collapse'
The family-owned business, founded in 1948, has several shops across Greater Glasgow, including one in Silverburn Shopping Centre, one at Glasgow Fort, one in Buchanan Galleries, one on Argyle Street in the city centre, and another in Braehead Shopping Centre in Renfrew.
Across the company, it currently employs 5,300 people in its stores and a further 950 at its head office in West London.
READ MORE: Future of major retailer with Glasgow stores at risk
It is understood that the struggling retailer has put forward a proposal to hand back the keys to 33 stores, slash the rents on a further 71 shops, and write off a series of debts to stave off a 'severe liquidity crisis'. The radical plan is set to be put before the High Court next week.
If it is backed by three-quarters of the retailer's creditors, then an emergency loan from River Island's founders, the billionaire Lewis family, will be unlocked and the firm will be able to pay its bills.
But if the proposal is rejected, the brand will effectively run out of cash by the end of August, which would leave it 'unable to pay its debts as they fall due', River Island told creditors.
Due to this, the clothing firm 'will not be able to continue trading as a going concern' and 'would be subject to administration or other insolvency proceedings'.
READ MORE: Discount retailer's Glasgow store at risk of closure
The warning will be laid out in a formal restructuring plan drawn up by the chain's advisers, PwC.
The report reveals how the company faces a £10 million 'funding need' in the second week of September, which is set to balloon to £50 million before the end of the year.
A River Island spokesperson 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 next few weeks.'
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