River Island at risk of collapse “within weeks” unless rescue plan approved
River Island could collapse “within weeks” unless its rescue plan is approved by shareholders and creditors, The Telegraph has reported.
The fashion retailer needs 75% approval from creditors for its rescue plan, which would see it close 33 stores, seek rent reductions at 71 further locations, and write of a series of debts.
If approved, the plan – which will be put before the High Court next week – will see an emergency loan from River Island’s founders the Lewis family released, enabling the retailer to pay off its debts.
However, if River Island’s plan is rejected, the retailer told its creditors that it is at risk of running out of cash by the end of August, and will be unable to pay off its debts.
As a result, the business would “not be able to continue trading as a going concern” and would be subject to administration or other insolvency proceedings, according to The Telegraph.
A spokesperson for River Island told the publication: “River Island circulated its proposals for a restructuring plan to creditors on June 20. In combination with the company’s ongoing Transformation Strategy, the plan is a proactive measure to place the company on a firm footing.
“We have been having positive conversations with key stakeholders and are confident that we will achieve approval of the plan in the next few weeks.”
River Island – which operates approximately 230 stores nationwide – announced its restructuring plan last month.