River Island is at risk of collapse “within weeks” if it is unable to secure landlord and creditor approval for its rescue plan.

The embattled fashion chain is proposing to close 33 stores, seek rent reductions on 71 further locations and write off a series of debts under its restructuring plan that will be put before the High Court next week, The Telegraph reported.

If River Island receives the green light from 75% of its creditors, an emergency loan from the retailer’s founders the billionaire Lewis family will be unlocked allowing the business to pay its bills.

However, if unsuccessful, the firm told creditors that the business is at risk of running out of money by the end of August and will be “unable to pay its debts as they fall due”.

Therefore, the business “will not be able to continue trading as a going concern” and “would be subject to administration or other insolvency proceedings”, it said.

In the formal restructuring plan drawn up by PwC, River Island faces a £10m “funding need” in the second week of September that will expand to £50m before the end of the year.

The retailer, which employs 5,300 people, blamed its crisis on “a sharp rise in the cost of doing business over the last few years” and “a large portfolio of stores that is no longer aligned to our customers’ needs”.

A company spokesman told the publication: “River Island circulated its proposals for a restructuring plan to creditors on June 20. In combination with the company’s ongoing 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 next few weeks.”

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