British excessive road model River Island is getting ready a restructuring plan, placing a major variety of its 230 shops and roughly 5,500 jobs in danger.
The Lewis household, who’ve owned the enterprise since its founding in 1948, are understood to be working with advisors from PricewaterhouseCoopers (PwC) to finalise a proper rescue proposal within the coming weeks, in accordance with Sky Information.
Whereas no choices have reportedly been made, the plans characterize a possible turning level for the long-standing model, which has struggled lately amid intense excessive road competitors, declining footfall and ongoing value pressures.
Again in January, the style model employed AlixPartners – which was additionally working with Poundland the revive the discounted retailer – after revealing a pre-tax lack of £32.3 million late final yr. Turnover additionally fell sharply, down greater than 19% to £578.1 million. Nonetheless, AlixPartners’ position is now understood to have shifted to PwC.
A restructuring plan would enable the corporate to renegotiate with landlords and different collectors underneath a court-supervised course of, much like methods not too long ago adopted by different embattled UK retailers comparable to Prezzo and Hobbycraft.
Though particulars stay underneath wraps, insiders recommend a plan could possibly be revealed as quickly as this summer time. Nonetheless, the extent of potential retailer closures or job cuts stays unknown.
In its newest annual report filed at Firms Home, River Island Holdings Restricted warned of a number of headwinds. “The marketplace for retailing of vogue clothes is quick altering with buyer preferences for extra numerous, handy and speedier purchasing journeys and with growing competitors, particularly within the digital house,” the corporate mentioned.
It cited “a extremely aggressive and altering retail setting mixed with elevated financial uncertainty” as key dangers, in addition to the results of “geopolitical occasions…provide chain disruption…and inflationary pressures” contributing to weakening client confidence.
As a part of its plans for a “yr of reset”, River Island appointed Suzy Slavid, Chief Government Officer of Wyse London, as its Buying and selling Supervisor Director in February. This was the identical month it introduced Ben Lewis had rejoined as CEO, following Richard Bradbury stepping down as Government Chair. Lewis beforehand held the CEO place at River Island for nearly a decade earlier than stepping down in 2019. His uncle, Bernard Lewis, is the founder and proprietor of River Island.
The information comes amid a broader wave of instability throughout the UK retail sector. Retailers are persevering with to reel from not solely Covid but in addition the current tax modifications launched by Chancellor Rachel Reeves in final autumn’s Price range, with many voicing frustration over the impression on already strained margins.
TheIndustry.vogue has contacted River Island for remark.
