River Island stores at risk as it considers CVA
River Island is reportedly considering launching a CVA or other form of administration due to the impact of the Covid-19 pandemic on sales and store footfall.
The fashion retailer is seeking to close some of its stores and slash rents on others across its 300-strong estate, Retail Week reported.
According to Retail Week, River Island executives have shown concern over whether creditors would approve of its CVA based on its healthy financially position in the market.
Under the 1986 Insolvency Act, the support of 75% of creditors is required to successfully undertake a CVA.
Last month, River Island announced its plans to cut 250 jobs at its head office as a result of the pandemic.
CEO Will Kernan had send an email to staff, which was seen by Retail Week, saying the business will “now have a requirement for some 250 fewer people in the business” due to falling footfall across the business.
The retailer has also furloughed the majority of staff during lockdown.
A number of retailers have opted for CVAs or other forms of administration due to the impact of the Coronavirus pandemic.
This week, sports retailer and gym group DW Sports has been placed into administration putting 1,700 employees at risk. In addition, value fashion retailer M&Co is also set for a pre-pack administration that will result in 50 of its stores closing.