A whole bunch extra excessive road jobs are being put in danger as a part of a sweeping overhaul of the family-owned style retailer River Island.
Sky Information has learnt that the clothes chain, which trades from about 230 shops, is proposing to shut 33 retailers in a restructuring plan which shall be put to collectors in August.
The destiny of an additional 70 shops relies upon agreements being reached with landlords to slash lease funds.
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Affirmation of the plans comes lower than a month after Sky News revealed that the corporate, which was based in 1948 by Bernard Lewis, was working with PricewaterhouseCoopers (PwC) on a restructuring plan.
In a press release issued on Friday, Ben Lewis, River Island’s chief govt, mentioned: “River Island is a much-loved retailer, with a decades-long historical past on the British excessive road.
“Nonetheless, the well-documented migration of buyers from the excessive road to on-line has left the enterprise with a big portfolio of shops that’s now not aligned to our prospects’ wants.
“The sharp rise in the price of doing enterprise over the previous few years has solely added to the monetary burden.
“We’ve got a transparent technique to remodel the enterprise to make sure its long-term viability.
“Current enhancements in our style supply and in-store procuring expertise are already exhibiting very optimistic outcomes, however it’s only with a restructuring plan that we will see this technique by and safe River Island’s future as a worthwhile retail enterprise.
“We remorse any job losses on account of retailer closures, and we’ll attempt to hold these to a minimal.”
The corporate declined to touch upon what number of jobs could be put in danger by the preliminary 33 store closures, or on the dimensions of the lease cuts being sought throughout talks with landlords.
In complete, it’s understood to make use of about 5,500 individuals.
Vogue retailing ‘quick altering’
Sources mentioned that new funding shall be injected into River Island if the restructuring plan is authorized in August.
Beforehand named Lewis and Chelsea Woman, the enterprise adopted its present model in the course of the Eighties.
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 in the course of the yr fell by greater than 19% to £578.1m.
A restructuring plan is a court-supervised course of which allows firms going through monetary difficulties to compromise collectors resembling landlords so as to keep away from insolvency proceedings.
An similar course of is getting used to close scores of Poundland shops and slash rents at tons of extra.
In its newest accounts at Firms Home, River Island Holdings Restricted warned of a large number of economic and operational dangers to its enterprise.
“The marketplace for retailing of style clothes is quick altering with buyer preferences for extra various, handy and speedier procuring journeys and with growing competitors particularly within the digital house,” it mentioned.
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The corporate added: “The important thing enterprise dangers for the group are the pressures of a extremely aggressive and altering retail atmosphere, mixed with elevated financial uncertainty.
“Quite a few geopolitical occasions have resulted in persevering with provide chain disruption in addition to vitality, labour and meals worth will increase, driving inflation and rates of interest larger and leading to weaker disposable revenue and decrease shopper confidence.”
Retailers have complained bitterly in regards to the affect of tax adjustments introduced by Rachel Reeves, the chancellor, in final autumn’s funds.
Since then, a cluster of well-known chains, together with Lakeland and The Authentic Manufacturing facility Store, have been pressured to hunt new house owners.
