A whole lot extra excessive road jobs are being put in danger as a part of a sweeping overhaul of the family-owned vogue retailer River Island.
The destiny of an extra 70 shops relies upon agreements being reached with landlords to slash lease funds.
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In a press release issued on Friday, Ben Lewis, River Island’s chief govt, stated: “River Island is a much-loved retailer, with a decades-long history on the British high street.
“Nonetheless, the well-documented migration of consumers from the excessive road 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 cost of doing business over the last few years has only added to the financial burden.
“We have now a transparent technique to remodel the enterprise to make sure its long-term viability.
“Recent improvements in our fashion offer and in-store shopping experience are already showing very positive results, but it is only with a restructuring plan that we will be able to see this strategy through and secure River Island’s future as a profitable retail business.
“We remorse any job losses because of retailer closures, and we’ll attempt to preserve these to a minimal.”
The company declined to comment on how many jobs would be put at risk by the initial 33 shop closures, or on the scale of the rent cuts being sought during talks with landlords.
In total, it is understood to employ about 5,500 people.
Sources said that new funding will be injected into River Island if the restructuring plan is approved in August.
Previously named Lewis and Chelsea Girl, the business, it adopting its current brand during the 1980s.
Accounts for River Island Clothing Co for the 52 weeks ended 30 December 2023 show the company made a £33.2m pre-tax loss.
Turnover during the year fell by more than 19% to £578.1m.
A restructuring plan is a court-supervised process which enables companies facing financial difficulties to compromise creditors such as landlords in order to avoid insolvency proceedings.
An identical process is being used to close scores of Poundland shops and slash rents at hundreds more.
In its latest accounts at Companies House, River Island Holdings Limited warned of a multitude of financial and operational risks to its business.
“The marketplace for retailing of vogue clothes is quick altering with buyer preferences for extra numerous, handy and speedier purchasing journeys and with growing competitors particularly within the digital area,” it stated.
“The key business risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty.
“Quite a few geopolitical occasions have resulted in persevering with provide chain disruption in addition to power, labour and meals worth will increase, driving inflation and rates of interest greater and leading to weaker disposable revenue and decrease shopper confidence.”
Retailers have complained bitterly concerning the affect 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 unit Store, have been pressured to hunt new homeowners.
