River Island drafts 'radical rescue plan' putting thousands of jobs at risk

British high street brand River Island is preparing a restructuring plan, putting a significant number of its 230 stores and roughly 5,500 jobs at risk.

The Lewis family, who have owned the business since its founding in 1948, are understood to be working with advisors from PricewaterhouseCoopers (PwC) to finalise a formal rescue proposal in the coming weeks, according to Sky News.

While no decisions have reportedly been made, the plans represent a potential turning point for the long-standing brand, which has struggled in recent years amid intense high street competition, declining footfall and ongoing cost pressures.

Back in January, the fashion brand hired AlixPartners - which was also working with Poundland the revive the discounted retailer - after revealing a pre-tax loss of £32.3 million late last year. Turnover also fell sharply, down more than 19% to £578.1 million. However, AlixPartners' role is now understood to have shifted to PwC.

A restructuring plan would allow the company to renegotiate with landlords and other creditors under a court-supervised process, similar to strategies recently adopted by other embattled UK retailers such as Prezzo and Hobbycraft.

Although details remain under wraps, insiders suggest a plan could be revealed as soon as this summer. However, the extent of potential store closures or job cuts remains unknown.

In its latest annual report filed at Companies House, River Island Holdings Limited warned of multiple headwinds. "The market for retailing of fashion clothing is fast changing with customer preferences for more diverse, convenient and speedier shopping journeys and with increasing competition, especially in the digital space," the company said.

It cited "a highly competitive and changing retail environment combined with increased economic uncertainty" as key risks, as well as the effects of "geopolitical events...supply chain disruption...and inflationary pressures" contributing to weakening consumer confidence.

As part of its plans for a "year of reset", River Island appointed Suzy Slavid, Chief Executive Officer of Wyse London, as its Trading Manager Director in February. This was the same month it announced Ben Lewis had rejoined as CEO, following Richard Bradbury stepping down as Executive Chair. Lewis 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.

The news comes amid a broader wave of instability across the UK retail sector. Retailers are continuing to reel from not only Covid but also the recent tax changes introduced by Chancellor Rachel Reeves in last autumn’s Budget, with many voicing frustration over the impact on already strained margins.

TheIndustry.fashion has contacted River Island for comment.