Major update on future of River Island as 33 shops earmarked for closure with hundreds of jobs at risk
The fate of the branches and whether rents are cut at 71 shops will now have to be decided later this week after the retailer failed to secure enough support from landlords and lenders.
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The chain is currently going through a major restructuring plan looking at balancing its books, which also includes writing off debts.
The plan was put to creditors on Friday, but did not reach a high enough backing to be approved.
The plans will now be put before the High Court on Thursday for a formal decision on whether they can go ahead.
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 coming days."
It comes just days after River Island was said to be on the "brink of collapse" with hundreds of jobs at risk.
The formal restructuring plan put in place by PwC states the chain will not be able to continue trading and would be "subject to administration or other insolvency proceedings if not approved.
Insolvency is when a company cannot afford to pay off its debts.
River Island stores and its online website remain open and trading as usual as the restructuring plan waits to be approved.
River Island confirms which 33 stores are shutting as a further 70 at risk in huge shake-up – is your local going?
It comes amid a challenging time for the brand, as a rise in ultra-cheap fast fashion and low consumer spending has hit retail businesses hard.
In a statement issued in June, Ben Lewis, chief executive officer, said: "River Island is a much-loved retailer, with a decades-long history on the British high street.
"However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers' needs.
"The sharp rise in the cost of doing business over the last few years has only added to the financial burden."
Trouble at the fashion firm
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 retailer's most recent accounts on Companies House also warned of worsening financial and operational risks.
They 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 recent months, a number of stores have closed including in Corby, Banbury and Chesterfield.
This is the full list here:
Beckton
Bangor Bloomfield
Wrexham
Edinburgh Princes Street
Hereford
Surrey Quays
Didcot
Sutton Coldfield
Aylesbury
Burton-Upon-Trent
Northwich
Taunton
Workington
Falkirk
Cumbernauld
Kirkcaldy
Gloucester
Hartlepool
Brighton
Lisburn
Norwich
Oxford
Poole
Kilmarnock
Hanley
Barnstaple
Grimsby
Leeds Birstall Park
Rochdale
Great Yarmouth
St Helens
Stockton-on-Tees
Perth
Even if the plan to close these 33 stores are approved, they will stay open until January 2026 to make the most of peak trading.
RETAIL PAIN IN 2025
The British Retail Consortium has predicted that the Treasury's hike to employer NICs will cost the retail sector £2.3billion.
Research by the British Chambers of Commerce shows that more than half of companies plan to raise prices by early April.
A survey of more than 4,800 firms found that 55% expect prices to increase in the next three months, up from 39% in a similar poll conducted in the latter half of 2024.
Three-quarters of companies cited the cost of employing people as their primary financial pressure.
The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year.
It comes on the back of a tough 2024 when 13,000 shops closed their doors for good, already a 28% increase on the previous year.
Professor Joshua Bamfield, director of the CRR said: "The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025."
Professor Bamfield has also warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
"By increasing both the costs of running stores and the costs on each consumer's household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020."
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