High Court lifeline: River Island granted green light to close stores to stay afloat

Though your local River Island store may be no more, the retailer isn't going anywhere anytime soon. This is all thanks to the High Court's approval today for a restructuring plan designed to pull the fashion chain back from the brink of administration.

The London-based retailer will shutter 33 UK stores and slash rents on a further 71 over the next three years, with some landlords asked to suspend payments entirely.

Matthew Weaver KC, representing River Island, told the court the brand "simply has not been able to reverse" its financial decline, pointing to supply chain disruption, energy price hikes and wage inflation as major pressures.

Five of the 10 creditor groups voted in favour of the plan on 1 August, clearing the way for Friday’s court sign-off. Without it, River Island was projected to run out of cash by early September, with a £43 million shortfall.

The retailer, which operates 223 stores across the UK and Ireland, will be supported by £40 million in new funding from Blue Coast Capital. Blue Coast is the founding Lewis family's personal investment company.

Weaver said the transformation plan combines operational changes, cost-cutting and targeted investment to restore profitability, improve cash flow, and safeguard jobs.

Sir Alastair Norris approved the restructuring plan, with a written judgment due at a later date.

The crisis at River Island has been building over the past year. In June, the company prepared a formal restructuring plan that would put a significant number of stores and jobs at risk. PwC took over advisory duties from AlixPartners, which had been hired in early 2024 following a £32.3 million pre-tax loss in 2023 and a 19% fall in turnover to £578.1 million.

The company has cited multiple headwinds in recent reports, including rising operational costs and increasing digital competition from ultra-fast fashion players such as Shein.

In written submissions to the court, Weaver added that River Island's sales and footfall dip were due to "the pressures of a highly competitive and changing retail environment as well as the prevailing trend away from high street retail stores to online shopping.

"A number of geopolitical events have also resulted in continuing supply chain disruption which, together with energy, labour and other price increases, has resulted in a cost base that’s too high and unsustainable at its current level."

To help spearhead its turnaround strategy, River Island has made multiple leadership changes this year. As part of its plans for a "year of reset", it appointed Suzy Slavid, Chief Executive Officer of Wyse London, as its Trading Manager Director in February. This was the same month Ben Lewis rejoined as CEO. He previously held the CEO position at River Island for almost a decade before stepping down in 2019. His uncle, Bernard Lewis, is the founder and owner of River Island.

River Island is one of many retailers navigating tough conditions across the UK's high streets due to economic and regulatory pressures.