The news that fashion giant River Island is on the brink of collapse has worried shoppers and staff alike. The retailer, a fixture on the UK high street for several decades, has been warned that it faces insolvency unless urgent action is taken.
The company could run out of cash within weeks unless landlords and creditors back a drastic rescue deal in the High Court. If three-quarters of creditors vote in favour, an emergency cash injection from River Island’s billionaire owners, the Lewis family, will be triggered.
The proposal, designed to avert a worsening liquidity crisis, is set to be heard at the High Court next week, the Telegraph reports. If approved, it would allow the business to keep trading and cover its bills. But if the deal is rejected, River Island has admitted it will effectively run out of money by the end of August and be unable to meet its obligations.
Already, 33 stores have been earmarked for closure, putting hundreds of jobs at risk as the company – one of the first high street retailers to launch online in the late 1990s – struggles to keep up with changing consumer habits.
Major cities and towns in all four UK nations are among those affected. Rent could be slashed at a further 71 stores, while huge swathes of debt are likely to be written off.
Major landlords such as British Land, the Crown Estate, and Mike Ashley’s Frasers Group are among those affected, though all declined to comment.
A River Island spokesman said: “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.”
