Lots of extra excessive avenue jobs are being put in danger as a part of a sweeping overhaul of the family-owned trend retailer River Island.
Sky Information has learnt that the clothes chain, which trades from about 230 shops, is proposing to shut 33 retailers in a restructuring plan which will probably be put to collectors in August.
The destiny of an extra 70 shops relies upon agreements being reached with landlords to slash lease funds.
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Affirmation of the plans comes lower than a month after Sky News revealed that the corporate, which was based in 1948 by Bernard Lewis, was working with PricewaterhouseCoopers (PwC) on a restructuring plan.
In an announcement issued on Friday, Ben Lewis, River Island’s chief government, stated: “River Island is a much-loved retailer, with a decades-long historical past on the British excessive avenue.
“Nonetheless, the well-documented migration of consumers from the excessive avenue to on-line has left the enterprise with a big portfolio of shops that’s not aligned to our prospects’ wants.
“The sharp rise in the price of doing enterprise over the previous few years has solely added to the monetary burden.
“We’ve got a transparent technique to remodel the enterprise to make sure its long-term viability.
“Current enhancements in our trend provide and in-store procuring expertise are already exhibiting very optimistic outcomes, however it is just with a restructuring plan that we will see this technique by way of and safe River Island’s future as a worthwhile retail enterprise.
“We remorse any job losses on account of retailer closures, and we’ll attempt to preserve these to a minimal.”
The corporate declined to touch upon what number of jobs can be put in danger by the preliminary 33 store closures, or on the dimensions of the lease cuts being sought throughout talks with landlords.
In whole, it’s understood to make use of about 5,500 folks.
Vogue retailing ‘quick altering’
Sources stated that new funding will probably be injected into River Island if the restructuring plan is accredited in August.
Beforehand named Lewis and Chelsea Lady, the enterprise adopted its present model throughout the Eighties.
Accounts for River Island Clothes Co, for the 52 weeks ended 30 December 2023, present the corporate made a £33.2m pre-tax loss.
Turnover throughout the yr fell by greater than 19% to £578.1m.
A restructuring plan is a court-supervised course of which allows corporations dealing with monetary difficulties to compromise collectors reminiscent of landlords with a view to keep away from insolvency proceedings.
An equivalent course of is getting used to close scores of Poundland shops and slash rents at a whole bunch extra.
In its newest accounts at Corporations Home, River Island Holdings Restricted warned of a mess of monetary and operational dangers to its enterprise.
“The marketplace for retailing of trend 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 stated.
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The corporate added: “The important thing enterprise dangers for the group are the pressures of a extremely aggressive and altering retail surroundings, mixed with elevated financial uncertainty.
“Quite a lot of 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 client confidence.”
Retailers have complained bitterly concerning the affect of tax adjustments introduced by Rachel Reeves, the chancellor, in final autumn’s funds.
Since then, a cluster of well-known chains, together with Lakeland and The Authentic Manufacturing facility Store, have been pressured to hunt new house owners.
