River Island has received court approval to proceed with its restructuring plans, which include the closure of 33 stores across the UK.
The fashion retailer cited a shift in consumer behavior towards online shopping and increasing operational costs as factors contributing to substantial financial losses.
The company had warned creditors that it risked running out of funds by the end of August if the proposed turnaround strategy was not sanctioned.
In addition to the store closures, rent reductions will be implemented at a further 71 locations. River Island’s CEO, Ben Lewis, stated the plan “will enable us to align our store estate to our customers’ needs”.
Negotiations with landlords are expected to commence imminently.
Alongside the retail footprint adjustments, approximately 110 positions at River Island’s headquarters, out of a total of 950, are slated for redundancy, resulting in projected savings of £8.1 million.
River Island currently operates 223 stores throughout the UK and Ireland, with the closures exclusively affecting UK locations.
The retailer has already shuttered seven underperforming stores this year, according to River Island’s barrister, Matthew Weaver KC, during High Court proceedings.
Weaver argued that insolvency was the only alternative if the restructuring plan was not approved.
Mr. Lewis affirmed the company possesses a “clear transformation strategy” to secure its future, adding, “and this decision gives us a strong platform to deliver this.”
Bloomberg intelligence analyst Charles Allen suggested River Island had struggled to maintain pace with evolving customer preferences, lacking “anything striking” in its offerings.
River Island, like many UK retailers, has also been impacted by the increasing prevalence of online shopping.
“There’s just less business going in shops,” Allen told BBC’s Today program, noting that rising costs, amplified by increases in employer National Insurance Contributions, have further strained the retailer.
Founded in 1948 under the Lewis and Chelsea Girl brand, the company employs approximately 5,500 individuals.
Rebranded as River Island in 1988, the company experienced consistent growth until recent years when sales began to decline, Weaver stated.
The company’s most recent financial statements reported a £33.2 million loss for the full year, following a 19% drop in sales.
Weaver also conveyed that River Island was projected to become unable to meet its debt obligations from late August or early September, facing a potential shortfall exceeding £43 million.
The company is pursuing £54 million in funding. Weaver stated during Friday’s hearing that the company “simply has not been able to reverse” a trend of financial difficulty.
Nick Sherrard, managing director at consultancy Label Sessions, commented that while collapse has been averted for now, marketing and creative teams now face the challenge of reigniting consumer interest in the brand.
“People keep repeating the line that River Island is a much-loved brand. It really isn’t anymore.”
He continued, “River Island is a much-recognised brand and, while that’s important, it’s not the same thing at all. Does someone have a vision for what to do after the cost cutting?”
“There are very few examples of companies shrinking into greatness.”
The restructuring, scheduled to begin in January 2026, involves the closure of 33 stores, and negotiations with landlords to reduce rents at a further 71 sites, potentially to zero in some instances.
Mr. Weaver acknowledged that certain landlords might prefer to reclaim retail space before lease expiry.
With the restructure, the company is forecasting 1% annual growth for the next five years.
River Island will close:
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