High Court green lights River Island restructuring plan
River Island’s restructuring plan aimed at keeping the fashion retailer out of administration has been approved by the High Court.
Under the terms of the rescue package, River Island will now close 33 UK stores and slash rents at a further 71 locations. Some landlords will also be requested to suspend payments entirely for up to three years.
River Island – which operates 223 stores across the UK and Ireland – has been under increasing financial pressure amid falling footfall and sales.
The retailer’s latest accounts showed a £33.2m pre-tax loss for the year ending 30th December 2023, while turnover declined by over 19% to £578.1m.
King’s Counsel Matthew Weaver, speaking at Friday’s hearing, said that without the court’s approval, River Island would likely enter an insolvency process. This would see the retailer sell off its stock and intellectual property.
He added: “In essence, the transformation plan seeks to address the root causes of the difficulties facing the group and to reposition River Island for long-term success. It involves a combination of operational improvements, cost rationalisation and strategic investment, all of which are critical to restoring profitability, improving cash flow, and safeguarding jobs.”