River Island’s future in limbo as creditors block restructuring plan

High street mainstay River Island faces an uncertain future after its proposed restructuring plan failed to gain support from all creditor classes in a key vote on Friday. The outcome now rests with a judge, who will decide on a sanction hearing this Thursday (8 August).

The 76-year-old retailer secured approval from around 80% of its creditors by value under the court-supervised vote. However, restructuring rules require each creditor class - including landlords, trade creditors and business rate authorities - to individually back the plan with at least 75% support for it to be automatically sanctioned. That threshold was not met across the board.

The proposed plan includes cutting rents (some to zero) across parts of its 230-strong store estate, alongside closing 33 stores and writing off some debt. The plan has reportedly faced strong resistance from landlords, many of whom stand to lose out if the rent cuts are enforced.

River Island has warned that without court approval, it could fall into administration as early as September.

A spokesperson for the retailer said: "In combination with the company’s transformation strategy, the plan is a proactive measure to place the company on a firm footing.

"We have been having positive conversations with key stakeholders and are confident that we will achieve approval of the plan in the coming days."

If approved, the Lewis family, which founded the business in 1948, is expected to inject £40 million via Blue Coast Capital, their personal investment company. Blue Coast is currently the group’s largest creditor, with exposure of £270 million.

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, a sharp consumer shift to online shopping and increasing digital competition from ultra-fast fashion players such as Shein.

In its most recent filing on Companies House, River Island acknowledged: "The market for retailing of fashion clothing is fast changing… with increasing competition, especially in the digital space."

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. If River Island’s restructuring plan is rejected on Thursday, it risks insolvency.