River Island has said it could collapse unless its landlords back a restructuring plan involving the closure of 33 stores and a sharp reduction in rent payments.
In documents outlining fresh details of the plan, which was first announced in June, the high street fashion retailer said it needed £10m in funds by the second week of September. It warned that figure could rise to £50m by the end of the year.
If the plan to reduce rents was not approved, via a vote and court hearing expected next month, the company told creditors it could run short of cash by the end of August and would be “unable to pay its debts as they fall due”.
As a result, River Island “will not be able to continue trading as a going concern” and “would be subject to administration or other insolvency proceedings”, it said in details first reported by the Telegraph.
The fashion retailer blamed its woes on “a sharp rise in the cost of doing business over the last few years” and the shift to online shopping, which had left it with “a large portfolio of stores that is no longer aligned to our customers’ needs”.
Its troubles come despite a strong spring for fashion retailers helped by warm weather. That followed a difficult 2024 and start to 2025 as households reined in spending on non-essentials, including clothing, as they battled a rise in the price of essentials including energy bills and food.
The company said it had lined up £40m in new funding from the investment vehicle of the Lewis family, who founded River Island and still control the business.
A spokesperson for River Island said it had put its plans to creditors a month ago and added: “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.”
Blue Coast Capital is River Island’s biggest lender with outstanding debts totalling £270m, according to the restructuring documents. It has agreed to an interest rate payment holiday and to push out the repayment date on its existing debts from 2027 to 2028 as part of the company’s fight for survival.
River Island swung to a £33.2m loss in 2023, according to its latest accounts filed at Companies House, after sales fell by more than 19% to £578.1m. It made profits of £2m in 2022.
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In January, the group launched a cost-cutting effort including a redundancy programme at its London head office, affecting departments such as buying and merchandising.
River Island, formerly known as Chelsea Girl, began selling clothing under the name Lewis’s in the 1940s.
The budget chain Poundland has launched a similar restructuring programme, with the eventual aim of shutting up to 150 stores, two distribution centres and ending online sales, putting 2,000 jobs at risk.