The household behind River Island, the excessive road style retailer, is drawing up a radical rescue plan which may put vital numbers of shops and jobs in danger.
Sky Information has learnt that the chain’s homeowners have drafted in advisers from PricewaterhouseCoopers (PwC) to plan a proper restructuring plan.
The proposals, that are anticipated to be finalised inside weeks, are topic to sign-off, with sources insisting this weekend that any agency selections about the way forward for the enterprise have but to be taken.
River Island is certainly one of Britain’s best-known clothes chains, working roughly 230 shops throughout the nation, and using roughly 5,500 folks.
Beforehand named Lewis and Chelsea Lady, the enterprise was based in 1948 by Bernard Lewis, lastly adopting its present model 4 many years later.
Accounts for River Island Clothes Co for the 52 weeks ending 30 December, 2023 present the corporate made a £33.2m pre-tax loss.
Turnover in the course of the yr fell by greater than 19% to £578.1m.
A restructuring plan is a court-supervised course of which permits corporations going through monetary difficulties to compromise collectors comparable to landlords so as to keep away from insolvency proceedings.
Lately, it has been utilized by corporations together with the informal eating chain Prezzo and, extra not too long ago, Hobbycraft, the retailer now owned by Modella Capital.
One supply mentioned that if it proceeded a restructuring plan at River Island may emerge inside weeks.
This weekend, it was unclear what number of shops and jobs may be beneath risk from a proper rescue deal.
In its newest accounts at Corporations Home, River Island Holdings Restricted warned of a large number of economic and operational dangers to its enterprise.
“The marketplace for retailing of style clothes is quick altering with buyer preferences for extra numerous, handy and speedier procuring journeys and with rising competitors particularly within the digital house,” it mentioned.
“The important thing enterprise dangers for the group are the pressures of a extremely aggressive and altering retail surroundings mixed with elevated financial uncertainty.
“Numerous geopolitical occasions have resulted in persevering with provide chain disruption in addition to vitality, labour and meals value will increase, driving inflation and rates of interest increased and leading to weaker disposable revenue and decrease shopper confidence.”
In January, Sky Information reported that River Island had employed AlixPartners, the consulting agency, to undertake work on value reductions and revenue enchancment.
AlixPartners’ position is now understood to have been outmoded by that of PwC.
Retailers have complained bitterly in regards to the influence of tax modifications introduced by Rachel Reeves, the chancellor, in final autumn’s Finances.
Since then, a cluster of well-known chains, together with Lakeland and The Authentic Manufacturing facility Store, have been pressured to hunt new homeowners.
Poundland, the low cost retail big, is within the latter phases of an public sale course of, with Hilco Capital and Gordon Brothers remaining focused on buying it.
A spokesperson for River Island declined to remark.
