River Island is the latest retailer at risk of carrying out store closures as the company's owners draw up a rescue plan to protect its existence on Britain's high streets, Sky News reports.
The fashion chain has enlisted advisers from PricewaterhouseCoopers to develop a formal restructuring plan that could place substantial numbers of stores and jobs in jeopardy.
It is understood that proposals to save River Island are anticipated to be completed within weeks.
Sources have emphasised that whilst the plans are being developed, no definitive decisions regarding the company's future have been made yet.
River Island's owners are drawing up a restructuring plan
PA
Furthermore, the restructuring proposals remain subject to approval before any action is taken.
As it stands, River Island operates approximately 230 stores throughout Britain and employs around 5,500 staff members.
Company accounts for the 52 weeks ending December 30, 2023 reveal the fashion chain recorded a pre-tax loss of £33.2million.
During the same period, turnover declined by more than 19 per cent to £578.1million.
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The high street has been hit with store closures in recent months PAThe business, which was established in 1948 by Bernard Lewis and initially traded as Lewis and Chelsea Girl, adopted its current River Island brand four decades later.
A restructuring plan is a court-supervised process that allows financially distressed companies to reach compromises with creditors, including landlords, to avoid insolvency proceedings.
This mechanism has been employed by various retailers in recent years as many retailers struggle to recover amid the cost of living crisis.
The casual dining chain Prezzo utilised the process, as did Hobbycraft more recently, which is now under the ownership of Modella Capital.
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Shops are disappearing from the high streetPAOne source indicated that River Island's restructuring plan could materialise within weeks if it proceeds. However, the number of stores and jobs potentially at risk from any formal rescue deal remains unclear at this stage.
The company previously engaged AlixPartners in January for work on cost reductions and profit improvement, though PwC has now taken over this advisory role.
River Island Holdings Limited has highlighted numerous financial and operational risks in its latest Companies House filings. The company stated: "The market for retailing of fashion clothing is fast changing with customer preferences for more diverse, convenient and speedier shopping journeys and with increasing competition especially in the digital space."
The retailer also warned: "A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence."
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