Landlords backing River Island’s rescue plan are braced for significant rent reductions, with some facing cuts of up to 100% as part of a restructuring led by the founding Lewis family.
The embattled fashion chain’s plan will close 33 stores and seek rent cuts on 71 others, with some landlords expecting reductions of 25% or 40%, while a number may receive no rent at all.
The Lewis family, through their investment firm Blue Coast Capital, are the retailer’s largest creditors with exposure totalling £205m. This position gives them control over negotiations with landlords as they push to reduce liabilities and secure the chain’s future.
One property source told The Times the restructuring plan forces landlords into an “uncomfortable position” as the alternative would be store closures and job losses across River Island’s portfolio of 230 sites.
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“Some landlords are effectively accepting no rent but at least keep getting business rates paid,” they said.
“River Island has been on our watch list for years, and while they paid their agreed rents during the pandemic, the ongoing poor trading has made these cuts inevitable.”
The retailer has faced criticism for failing to renegotiate lease terms during the pandemic, unlike some peers, and for overexpanding its physical estate at a time when online rivals such as Shein have gained market share.
River Island, which employs around 5,300 people, will put its restructuring plan to a vote among creditors on 1 August. The company is confident of securing approval given the Lewis family’s dominant lending position.
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