The High Court has accepted River Island’s restructuring plans, allowing the apparel retailer to shut 33 outlets in the United Kingdom. The High Street brand claimed that multi-million pound losses were caused in part by a shift in consumer preferences toward internet shopping and increased operating expenses. It had informed its creditors that if its turnaround plan was rejected, it may run out of money by the end of August.
In addition to shutting stores, River Island CEO Ben Lewis stated that the plan “will enable us to align our store estate to our customers’ needs” by lowering rents at an additional 71 locations. We’re about to start negotiating with those landlords. About 110 of the approximately 950 positions at River Island’s head office will be eliminated, saving an estimated £8.1 million, in addition to the retail closures and rent savings.
There are 223 River Island shops in the UK and Ireland. Not a single Irish store is going to close. According to River Island’s attorney Matthew Weaver KC, the company has already shut down seven stores this year that are losing money. He stated that insolvency was the option if the reorganization was not authorized. According to Mr. Lewis, the firm has a “clear transformation strategy” to make sure it has a future, “and this decision gives us a strong platform to deliver this”.
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