River Island to shut 33 stores with hundreds of job losses to help save the chain

DOZENS of River Island shops are set to close down for good and hundreds of jobs will be lost.

At least 33 shops will shut as part of a major restructuring plan approved by the High Court today.

The plan is aimed at balancing the retailer’s books and writing off its debt as it struggles to stay afloat.

River Island had submitted its plans to the High Court for approval and the court decided this morning to let those plans go ahead.

The fates of another 71 shops also now hang in the balance.

Last week, the chain failed to get landlord approval for rent reductions at these stores.

But the High Court decision could still mean the rent reductions go ahead.

Today’s decision will be a relief for the retailer, which had warned it was on the brink of collapse.

The formal restructuring plan put forward by PwC had stated the chain would not be able to continue trading and would be “subject to administration or other insolvency proceedings” if it was not approved.

River Island currently has more than 250 stores across the country and around 5,500 employees.

The plans mean more than 140 stores and thousands of jobs are likely to be saved.

New funding is also expected to be injected into River Island now the restructuring plan has been approved.

Advisers from PwC were reportedly drafted in to come up with money-saving solutions just weeks ago.

Trouble at River Island

River Island says it has been hit hard by the rise in ultra-cheap fast fashion and lower customer spending.

Its CEO Ben Lewis said in June: “River Island is a much-loved retailer, with a decades-long history on the British high street.

“However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers’ needs.

“The sharp rise in the cost of doing business over the last few years has only added to the financial burden.”

River Island revealed in late 2023 it had made pre-tax losses of £33.2million.

Its turnover over the next year fell by more than 19% to £578.1million.

The retailer’s most recent accounts on Companies House also warned of worsening financial and operational risks.

They said: “The key business risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty.

“A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence.”

In recent months, a number of stores have closed including in Corby, Banbury and Chesterfield.

Retail sector struggles

The retail sector has struggled in recent years because of the rise of online shopping, lockdowns during the coronavirus pandemic and decreased customer spending.

Earlier this summer, the owners of Poundland confirmed they would shut 68 stores with 82 more at risk.

Both Hobbycraft and The Original Factory Shop are also shutting branches as part of restructuring efforts.

Higher inflation since 2022 has hit shoppers’ budgets while businesses have struggled with higher wage, tax and energy costs.

The Centre for Retail Research has described the sector as going through a “permacrisis” since the 2008 financial crash.

Figures from the Centre also show 34 retail companies operating multiple stores stopped trading in 2024, leading to the closure of 7,537 shops.