River Island homeowners draw up rescue plan for prime avenue chain

The household behind River Island, the excessive avenue trend retailer, is drawing up a radical rescue plan which may put vital numbers of shops and jobs in danger.

Sky Information has learnt that the chain’s homeowners have drafted in advisers from PricewaterhouseCoopers (PwC) to plan a proper restructuring plan.

The proposals, that are anticipated to be finalised inside weeks, are topic to sign-off, with sources insisting this weekend that any agency choices about the way forward for the enterprise have but to be taken.

River Island is one in all Britain’s best-known clothes chains, working roughly 230 shops throughout the nation, and using roughly 5,500 individuals.

Accounts for River Island Clothes Co for the 52 weeks ended 30 December 2023 present the corporate made a £33.2m pre-tax loss.

Turnover through the yr fell by greater than 19% to £578.1m.

A restructuring plan is a court-supervised course of which permits firms going through monetary difficulties to compromise collectors similar to landlords with a purpose to keep away from insolvency proceedings.

In recent times, it has been utilized by firms together with the informal eating chain Prezzo and, extra not too long ago, Hobbycraft, the retailer now owned by Modella Capital.

One supply mentioned that if it proceeded, a restructuring plan at River Island may emerge inside weeks.

This weekend, it was unclear what number of shops and jobs may be below risk from a proper rescue deal.

In its newest accounts at Corporations Home, River Island Holdings Restricted warned of a mess of economic and operational dangers to its enterprise.

“The marketplace for retailing of trend clothes is quick altering with buyer preferences for extra various, handy and speedier procuring journeys and with rising competitors particularly within the digital house,” it mentioned.

“The important thing enterprise dangers for the group are the pressures of a extremely aggressive and altering retail setting mixed with elevated financial uncertainty.

“Plenty of geopolitical occasions have resulted in persevering with provide chain disruption in addition to vitality, labour and meals value will increase, driving inflation and rates of interest increased and leading to weaker disposable earnings and decrease client confidence.”

In January, Sky Information reported that River Island had employed AlixPartners, the consulting agency, to undertake work on price reductions and revenue enchancment.

AlixPartners’ position is now understood to have been outdated by that of PwC.

Retailers have complained bitterly concerning the impression of tax adjustments introduced by Rachel Reeves, the chancellor, in final autumn’s Price range.

Since then, a cluster of well-known chains, together with Lakeland and The Authentic Manufacturing unit Store, have been pressured to hunt new homeowners.

Poundland, the low cost retail large, is within the latter phases of an public sale course of, with Hilco Capital and Gordon Brothers remaining all in favour of buying it.

A spokesperson for River Island declined to remark.