In My View by Eric Musgrave: What now for River Island?
Last Friday the team at River Island must have breathed a long sigh of relief when it won High Court approval for a controversial restructuring plan that, reportedly, plenty of landlords took a dim view of.
In the end, 80% of the group’s creditors voted for the plan. Surprisingly, River Island had warned that without the restructuring the company would be unable to continue trading as it was heading for insolvency.
In short, River Island, not that long ago regarded as the best-in-class of the UK’s fashion multiples, was in danger of running out of money.
The question now is, how will the Lewis family, which wholly owns the business, regain anything like its highly profitable past performance? Its 5,500 employees across the current 223 stores and head office at Hangar Lane, west London, will be among those most concerned about the future.
The green light was given last week to the closure of 33 stores in January 2026 and slashed rents for the next three years on a further 71 stores (including 24 moving to zero rents). According to press reports, up to 1,000 jobs are at risk from this pruning of the estate. The units axed are described as “no longer where the group customers shop” by management.
(Ian West/PA)
River Island is also expected to receive a £40m cash injection from Blue Coast Capital, the investment vehicle of the Lewises.
Its trading problems are severe. River Island dropped to a £33.2m loss in 2023, according to its latest accounts at Companies House, after sales fell by more than 19% to £578.1m. In 2022 it made profits of £2m. As recently as 2016 the business made £124.5m on sales of £970.5m. Its decline has been as spectacular as it has been surprising.
Speaking to The Sunday Times in 2017, Bernard Lewis, the founder of the family business in 1946, said: “We’ve only got 250 shops in the UK, and every one is a decent shop. We have no shops that don’t make money, but I recognise that online is the exciting thing.”
Admitting he initially was sceptical about ecommerce, the retailing legend observed: “It’s basically a highly inefficient way of handing merchandise… but the public wants it, and they’re prepared to pay for it.”
It seems obvious that other websites are much more popular with the public than River Island’s and it clearly has suffered worse than many “traditional” retailers in having a large store estate in the post-pandemic landscape. River Island used to boast (quietly) that it was a desirable anchor tenant in any major high street or shopping centre, but a Next, Primark, Zara or H&M would surely be higher up the landlord’s list these days.
“It’s hard to say exactly why River Island has suffered so much recently, in a crowded middle market for women’s fashion, although the management of the business doesn’t seem as strong as it used to be. The likes of Next, of course, have been much smarter with their store location and portfolio evolution and have a wider clothing range,” retail analyst Nick Bubb told me last week. “Bashing landlords is unlikely to be the answer for River Island. The usual solution in these cases is to manage the decline by retrenching to less competitive secondary locations.”
Observers of this unhappy situation pose the essential question: What does River Island represent these days, and who is it aimed at?
Readers with long memories will recall that the unisex River Island appeared in 1988 and within a couple of years totally replaced the celebrated Chelsea Girl chain that had been the Lewis family’s money-maker since 1965. Chelsea Girl itself had superseded Lewis Separates, the innovative chain that Bernard Lewis had started in 1948.
Chelsea Girl in the 1980s
This was an amazing trio of retail successes that reflected the Lewis family’s clever reading of the market. Talking to me in 2005 Bernard Lewis – who remains the most impressive person I have met in my 45-year career – explained: “We are fashion retailers. We always move the business along. Chelsea Girl had a cheap and cheerful image and I knew that was not what was needed for the future. The format changes from Lewis Separates to Chelsea Girl to River Island were not big risks; we tested first, we knew what we were doing. The risk would have been failing to move on.”
Lewis Separates had a lifespan of just under 20 years, Chelsea Girl lasted just over 20 years, but River Island has been with us for 37 years, admittedly evolving along the way. Slightly older (aimed at 25 to 35 year olds), more sophisticated and more upmarket than Chelsea Girl, it was in part a reaction to the huge impact the arrival of George Davies’ Next in 1982 (for womenswear) and 1984 (menswear) caused.
River Island's arrival was in part a reaction to the launch of Next
Chronic price deflation over the past 20 years has been another challenge for River Island, which must have lost customers in recent years to the fashion force that is Primark. Also it is easy to overlook how much clothing Sport Direct sells these days too.
River Island cannot be relevant to any consumers who grew up shopping online with Asos or Boohoo. The boom in athleisure and trainers will have been a challenge also for a chain known for dressy clothes, good denims and a strong footwear range. Presumably the second-hand market also attracts consumers who once might have shopped at River island.
With rivals like Topshop, Topman, Dorothy Perkins, Oasis and Warehouse all now gone or pale online shadows of their past, River Island is a lonely survivor of a golden age of pre-internet fashion multiples. It’s telling that another relic of that period, New Look, is up for sale.
Could River Island be disposed of by the Lewis family? If so, who would want to buy it? Maybe the South African-owned TFG, which has collected up some smaller competitors like Whistles, Hobbs and Phase Eight, might wish to take on a larger concern. TFG’s parent company Foschini might be tempted but almost 200 stores is a lot to take on.
Would Next want it? Unlikely. Maybe a restructuring expert like Hilco or Gordon Brothers? That would not suggest a long life for River Island. Ditto if a private equity house bought it.
Charged with sorting out the considerable challenges are cousins Clive Lewis, who is 68, and Ben Lewis, 58, who are respectively non-executive chairman and CEO. Clive is a son of Bernard Lewis. Ben’s father was the late David Lewis, Bernard’s older brother and property specialist who built up the national chain with Bernard.
The only non-Lewis to run the business for any length of time is Richard Bradbury, who joined as head of womenswear buying for River Island in 1989 from The Burton Group. In 1998 he was made MD of the company following a serious injury in 1994 to Leonard Lewis, Bernard’s oldest son, who was his obvious heir apparent.
Between 1994 and 1998 Clive was CEO. Bradbury stayed with the company until 2009 when he was succeeded by Ben Lewis as CEO. When Ben stepped down in late 2019, an outsider was hired - Will Kernan, former CEO of premium homewares brand The White Company, who also had 13 years at New Look on his CV.
When Kernan departed in late 2022, Bradbury, by then aged 66, made a surprise return as executive chair, 12 years after leaving for semi-retirement. A change in his family circumstances prompted Bradbury to depart again in February this year, sparking the return of Clive and Ben.
Critics of the group maintain the Lewis family’s control deters new blood joining the senior management team. If that is the case, the Lewis clan will have to find their own way of repositioning River Island.
Watching all this unfold is Bernard Lewis himself, the life president of the family empire, who was 99 years old in February and by all accounts still takes a close interest in the family fortunes. Those fortunes are considerable – on the most recent Sunday Times Rich List Bernard Lewis and family are at No 59 with a net worth of £2.724bn.
It is certain the secretive Lewis clan will not have enjoyed the ongoing press scrutiny. Back in 2005 Bernard told me why he avoided publicity: “It’s difficult now for people to realise how hot we were once we found our successful formula in the late 1950s and early 1960s. People didn’t know how good we were , but we did and we had no intention of telling them how we did it. We were the only game in town.”
How times change.
