River Island Launches Restructuring Plan
River Island plans to close 33 stores across the United Kingdom in a major cost-saving restructure. The British fashion retailer warned the move could put over 1,000 jobs at risk.
Online Shopping Shift and Rising Costs Drive Closures
The family-owned brand said the closures follow a sharp shift in consumer behaviour towards online shopping. Rising operating costs have further pressured its business model.
71 More Stores at Risk if Rent Talks Fail
The company also seeks rent reductions across 71 other stores. These outlets may shut if landlords reject revised lease terms.
River Island store
Retailer Struggles After £33.2 Million Loss in 2023
River Island reported a £33.2 million loss in 2023 after its sales fell 19 percent to £578.1 million. It recorded a £2 million profit in 2022.
Ben Lewis Outlines Plan to Adapt Retail Model
Ben Lewis, River Island’s chief executive, confirmed the business needs realignment due to changing customer habits. “River Island is a much-loved retailer, with a decades-long history on the British high street,” Lewis said. “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.”
Restructuring Involves Staff Consultations and Redeployment Efforts
The company will consult affected staff and attempt redeployment where feasible. It confirmed no head office staff would lose jobs due to closures.
Creditors to Vote on Restructuring in August
Creditors will vote on the proposed plan on 4 August. A court decision on the final approval is expected on 7 August.
Advisory Firm PricewaterhouseCoopers Assisting with Plan
River Island appointed PricewaterhouseCoopers to guide its restructuring efforts, reflecting the growing complexity of retail recovery strategies.
Fashion Sector Faces Intense Competition and Low Consumer Confidence
Susannah Streeter of Hargreaves Lansdown said River Island’s challenges mirror broader sector issues. She noted online competitors like Shein and Temu continue disrupting fashion retail with lower prices.
Retailers Struggle as Consumer Spending Stays Low
High street retailers have seen declining footfall amid weak consumer confidence. Rising inflation has reduced household spending on non-essential items.
National Insurance Changes Add Pressure on Store-Heavy Chains
Streeter added that increased employer National Insurance contributions have worsened cost burdens for retailers with large physical store estates.
River Island’s History Spans Over 75 Years
Founded in 1948 under the Lewis and Chelsea Girl brands, River Island rebranded in the 1980s. It currently operates 230 stores and employs about 5,500 staff.
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London Office Restructuring Began in January
In January, River Island implemented staff reductions at its London headquarters. The cuts affected departments including buying and merchandising.
Sector-Wide Struggles Persist Amid Inflation and Tax Burdens
River Island’s difficulties come as other retailers pursue similar cost-cutting plans. Poundland may shut 150 stores and two distribution centres.
Mulberry Seeks £20 Million to Fund Turnaround
Luxury retailer Mulberry recently announced a £23 million annual loss and plans to raise £20 million to support a new turnaround plan.
Online Giants Disrupt Traditional Retail Channels
Retailers face mounting pressure from e-commerce giants like Amazon, Shein and Temu. These firms attract price-sensitive consumers, impacting store-based businesses.
More Restructuring Plans Expected in Retail
Matthew Padian of Stevens & Bolton expects further restructuring plans across retail. He noted that pandemic-era legal changes now make restructuring more accessible. “There will be more coming down the track as it doesn’t look like it is getting any easier for retailers,” he said.
Retail Landscape Shifting Rapidly
Retailers across the UK continue to adapt to rising taxes, higher wages, and inflation. These challenges accelerate strategic changes, including store closures and digital transformation.
Retail Chains Embrace Digital Channels
Fashion retailers now prioritise online presence to match consumer demand. River Island’s move reflects a broader industry transition away from physical outlets.
Focus Remains on Retail Transformation and Workforce Support
River Island’s plan aims to realign operations while minimising job losses. The outcome of creditor votes in August will shape its recovery path.
