Latest news with #TransformationStrategy
Scottish Sun
5 days ago
- Business
- Scottish Sun
Full list of 33 River Island shops set to SHUT as chain at risk of collapsing within just weeks
Drastic measure is floated to keep the brand alive SHOPPING MAUL Full list of 33 River Island shops set to SHUT as chain at risk of collapsing within just weeks Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) THE full list of River Island stores at risk of closure has been revealed – and it includes sites in major cities. Shops in Oxford, Edinburgh, Brighton and Leeds are facing the axe to prevent the iconic brand from collapsing. Sign up for Scottish Sun newsletter Sign up 1 River Island is fighting a battle for survival as customers move online to shop Credit: Getty The iconic fashion chain could reportedly run out of money in August if plans to shut the 33 stores and cut rents on a further 71 are not given the green light. The retailer has already revealed which 33 branches will shutter and has confirmed they will close in January. This does note affect which is continuing to trade. River Island is also looking to write off a series of debts, including those to landlords, to help keep the brand afloat. A formal restructuring plan written up by the chain's advisers, PwC, states that the chain will not be able to "continue trading" and would be "subject to administration or other insolvency proceedings" if plans are not approved. A spokesperson said: "River Island circulated its proposals for a Restructuring Plan to creditors on June 20th. "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." Major card chain with 163 shops launches closing down sales ahead of shutting its doors for good It comes amid a challenging time for the brand, as a rise in ultra-cheap fast fashion and low consumer spending has hit retail businesses hard. In a statement, issued last month, Ben Lewis, chief executive officer, said: "River Island is a much-loved retailer, with a decades-long history on the British high street. "However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers' needs. "The sharp rise in the cost of doing business over the last few years has only added to the financial burden." Worsening financial position Accounts for River Island Clothing Co for the year ending December 30, 2023, showed the firm made a £33.2 million pre-tax loss. Then the turnover during the following 12 months fell by more than 19% to £578.1 million. The retailer's most recent accounts on Companies House also warned of worsening financial and operational risks. They said: "The key business risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty. "A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence." In recent months, a number of stores have closed including in Corby, Banbury and Chesterfield.
Fashion Network
5 days ago
- Business
- Fashion Network
River Island on the brink if restructuring plan not approved
If not, it 'will effectively run out of money by the end of August', the newspaper reported and 'will not be able to continue trading as a going concern'. That would mean administration or insolvency proceedings. River Island has blamed rising costs in recent years and the shift to online shopping, which means its 'large portfolio of stores… is no longer aligned to our customers' needs'. The warning comes in the formal restructuring plan produced by advisers PwC, which says the business will otherwise face a £10 million 'funding need' in early September. That need will add up to £50 million before the end of 2025. It's a tough situation for a company that's one of the UK's key affordable fashion retailers and that employs 6,250 people. Of those, 5,300 are in its stores and 950 at its West London HQ. As with some previous fashion sector restructurings during the last decade, the plan is likely to be opposed by some landlords who feel they're often made to endure the most pain when retailers run into trouble. And opposition is understandable when those owning some of those 71 stores are being asked for three-year rent cuts of at least 25% and up to 75%, or to accept no rent payments at all. The newspaper said that affected landlords would include British Land, the Crown estate and Frasers Group, which has been moving into the property space in recent years. Local councils would also be affected as River Island seeks to leave behind business rates arrears. A company spokesman told the newspaper: '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.'
Scottish Sun
5 days ago
- Business
- Scottish Sun
Major high street fashion retailer ‘on brink of collapse' as SIX stores in Scotland set to close
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A MAJOR high street fashion retailer is reportedly on the brink of collapse and could run out of money by the end of August. Bosses at River Island are hoping their latest rescue plans are given the green light by creditors and landlords, which will "stave off a severe liquidity crisis". 2 River Island is said to be on the 'brink of collapse' Credit: Getty 2 Bosses previously confirmed the 33 high street branches that will shut Credit: Alamy According to The Telegraph, the proposal includes shutting 33 stores, cutting rents on a further 71 branches, and writing off debts. The iconic fashion chain already revealed which shops will pull the shutters down for good, and the list includes six branches in Scotland. Last month, bosses said that those earmarked for closure will stay open until January 2026 to make the most of peak trading. The firm's proposals are set to go before the High Court next week and will need to be agreed by 75 per cent of creditors to get the go-ahead. If it does, then the retailer will receive an emergency £40million loan from owners, the billionaire Lewis family. This would allow the high street chain to pay its bills and keep the brand afloat. The migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers' needs Ben Lewis If the proposals are not given the green light, then River Island "will effectively run out of money by the end of August", according to The Telegraph. This would mean that it could not continue trading and 'would be subject to administration or other insolvency proceedings'. However, sources close to the situation revealed that details of the plan have been met with some pushback. This is because landlords of the 24 stores that are not being closed could be asked to move to a zero-rent model. I'm a size 20... my friends are an 8 and short size 12 - we tried the same four occasion glam dresses and all looked fab And the retailer has also proposed three-year rent cuts of between 75 per cent and 25 per cent. A spokesperson said: "River Island circulated its proposals for a Restructuring Plan to creditors on June 20th. "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." The retailer drafted in advisers from PricewaterhouseCoopers (PwC) just months ago to come up with money-saving solutions. Which River Island stores face closure? HERE is the full list of all the 33 stores that will shut: Beckton Bangor Bloomfield Wrexham Edinburgh Princes Street Hereford Surrey Quays Didcot Sutton Coldfield Aylesbury Burton-Upon-Trent Northwich Taunton Workington Falkirk Cumbernauld Kirkcaldy Gloucester Hartlepool Brighton Lisburn Norwich Oxford Poole Kilmarnock Hanley Barnstaple Grimsby Leeds Birstall Park Rochdale Great Yarmouth St Helens Stockton On Tees Perth And the advisers have warned that if plans are not approved, then the retailer will face a £10million 'funding need' in early September. This will then add up to a total of £50million before the end of 2025. River Island currently employs around 5,500 workers across the UK. However, bosses have not said how many jobs are at risk due to the closures. River Island has said the store closures are a result of rising costs over recent years and more customers switching to online shopping. We regret any job losses as a result of store closures, and we will try to keep these to a minimum Ben Lewis The firm said it means its "large portfolio of stores… is no longer aligned to our customers' needs'. The six stores across Scotland that are set to close include the branches in Perth, Kilmarnock, Falkirk, Cumbernauld, Kirkcaldy, and Edinburgh's Princes Street. The move came off the back of poor financial results. Accounts for River Island Clothing Co for the year ending December 30, 2023, showed the firm made a £33.2million pre-tax loss. Then the turnover during the following 12 months fell by more than 19 per cent to £578.1million. Ben Lewis, CEO of River Island, previously said: "River Island is a much-loved retailer, with a decades-long history on the British high street. "However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers' needs. "The sharp rise in the cost of doing business over the last few years has only added to the financial burden. "We have a clear strategy to transform the business to ensure its long-term viability. "Recent improvements in our fashion offer and in-store shopping experience are already showing very positive results. "But it is only with a restructuring plan that we will be able to see this strategy through and secure River Island's future as a profitable retail business. "We regret any job losses as a result of store closures, and we will try to keep these to a minimum.'
Fashion Network
6 days ago
- Business
- Fashion Network
River Island on the brink if restructuring plan not approved
If not, it 'will effectively run out of money by the end of August', the newspaper reported and 'will not be able to continue trading as a going concern'. That would mean administration or insolvency proceedings. River Island has blamed rising costs in recent years and the shift to online shopping, which means its 'large portfolio of stores… is no longer aligned to our customers' needs'. The warning comes in the formal restructuring plan produced by advisers PwC, which says the business will otherwise face a £10 million 'funding need' in early September. That need will add up to £50 million before the end of 2025. It's a tough situation for a company that's one of the UK's key affordable fashion retailers and that employs 6,250 people. Of those, 5,300 are in its stores and 950 at its West London HQ. As with some previous fashion sector restructurings during the last decade, the plan is likely to be opposed by some landlords who feel they're often made to endure the most pain when retailers run into trouble. And opposition is understandable when those owning some of those 71 stores are being asked for three-year rent cuts of at least 25% and up to 75%, or to accept no rent payments at all. The newspaper said that affected landlords would include British Land, the Crown estate and Frasers Group, which has been moving into the property space in recent years. Local councils would also be affected as River Island seeks to leave behind business rates arrears. A company spokesman told the newspaper: '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.'
Fashion Network
6 days ago
- Business
- Fashion Network
River Island on the brink if restructuring plan not approved
is at risk of collapse 'within weeks' unless its radical rescue plan is approved, a newspaper claimed on Thursday. And while it's likely to face opposition, such plans do have a history of being approved as the alternative is often worse for creditors. The Telegraph said it has seen a proposal that includes shutting 33 stores (as had already been revealed), as well as cutting rents on 71 more and writing off debts in order to 'stave off a severe liquidity crisis'. It said the plan will go before the High Court next week and requires agreement from three-quarters of the retailer's creditors. If it gets that, an emergency £40 million borrowing facility from its owners-founders (the billionaire Lewis family) will allow it to pay its bills. If not, it 'will effectively run out of money by the end of August', the newspaper reported and 'will not be able to continue trading as a going concern'. That would mean administration or insolvency proceedings. River Island has blamed rising costs in recent years and the shift to online shopping, which means its 'large portfolio of stores… is no longer aligned to our customers' needs'. The warning comes in the formal restructuring plan produced by advisers PwC, which says the business will otherwise face a £10 million 'funding need' in early September. That need will add up to £50 million before the end of 2025. It's a tough situation for a company that's one of the UK's key affordable fashion retailers and that employs 6,250 people. Of those, 5,300 are in its stores and 950 at its West London HQ. As with some previous fashion sector restructurings during the last decade, the plan is likely to be opposed by some landlords who feel they're often made to endure the most pain when retailers run into trouble. And opposition is understandable when those owning some of those 71 stores are being asked for three-year rent cuts of at least 25% and up to 75%, or to accept no rent payments at all. The newspaper said that affected landlords would include British Land, the Crown estate and Frasers Group, which has been moving into the property space in recent years. Local councils would also be affected as River Island seeks to leave behind business rates arrears. A company spokesman told the newspaper: '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.'
