River Island has secured High Court approval for a restructuring plan designed to keep the fashion chain out of administration.
The embattled retailer will close 33 UK stores and cut rents across a further 71 as part of the rescue package, which also asks some landlords to suspend payments entirely for up to three years. None of its Irish stores will be affected.
The move follows mounting financial pressures, with River Island citing falling footfall, the shift to online shopping, supply chain disruption, and rising energy, labour and operating costs as key challenges.
KC Matthew Weaver, representing River Island at Friday’s hearing, told the court the company “simply has not been able to reverse” a trend of financial difficulty. He highlighted “the pressures of a highly competitive and changing retail environment” and the “prevailing trend away from high street retail stores to online shopping.”
Weaver also noted “a number of geopolitical events” that have led to ongoing supply chain disruptions alongside “energy, labour and other price increases,” resulting in “a cost base that’s too high and unsustainable at its current level.”
Court documents revealed the business is facing a projected shortfall of more than £43m and is seeking £54m in new funding to stabilise its balance sheet.
Without the plan, River Island warned it would likely enter insolvency, triggering the sale of stock, brand, and intellectual property.
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Around half of its 10 creditor classes backed the plan at a meeting on 1 August, prompting the need for judicial sign-off. No objections were raised during Friday’s hearing.
Weaver warned that without the plan’s approval, the “most likely scenario” would be River Island entering an insolvency process, triggering the sale of its stock, brand, and intellectual property. He said the company is forecast to be unable to pay its debts from late August or early September.
The lawyer also addressed recent correspondence from some creditor landlords, suggesting there “may well be an attempt by those landlords to extract value from the plan company by taking a ransom position.”
Weaver added: “In essence, the transformation plan seeks to address the root causes of the difficulties facing the group and to reposition River Island for long-term success. It involves a combination of operational improvements, cost rationalisation and strategic investment, all of which are critical to restoring profitability, improving cash flow, and safeguarding jobs.”
River Island, which operates 223 stores across the UK and Ireland and employs 5,500 people, was founded in 1948 and rebranded under its current name in the 1980s.
Experts say the use of restructuring plans — a mechanism introduced during the pandemic — is likely to rise as retailers continue to battle weak footfall, higher wages, and elevated taxes such as business rates and national insurance.
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