River Island is the latest high street staple at risk of going under unless creditors and landlords approve rescue deal with 33 stores currently earmarked for closure.
The clothing retailer has put forward a proposal to shut down multiple locations and slash the rents on 71 stores as it attempts to write off debts to prevent a liquidity crisis.
The rescue plan from River Island's business and legal representatives will be put before the High Court next week.
If this deal gets the support of three quarters of the retailer’s creditors, an emergency loan from River Island’s founders will be made avaialble.
PA | River Island stores are earmarked for closure
This funding from the billionaire Lewis family will the company to pay off its various bills and debts, however talks are still ongoing, The Telegraph reports.
If the deal is rejected by River Island, the business will effectively run out of money by the end of August, leaving it "unable to pay its debts as they fall due", it told creditors.
As such, River Island "will not be able to continue trading as a going concern" and "would be subject to administration or other insolvency proceedings".
These comments can be found in the formal business restructuring plan from accountancy giant PwC, which is acting as the retailer's adviser.
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PA | Shops are disappearing from the high streetHere is a full list of the 33 River Island stores at risk of closure next month:
- Beckton
- Bangor Bloomfield
- Wrexham
- Edinburgh Princes Street
- Hereford
- Surrey Quays
- Didcot
- Sutton Coldfield
- Aylesbury
- Burton-Upon-Trent
- Northwich
- Taunton
- Workington
- Falkirk
- Cumbernauld
- Kirkcaldy
- Gloucester
- Hartlepool
- Brighton
- Lisburn
- Norwich
- Oxford
- Poole
- Kilmarnock
- Hanley
- Barnstaple
- Grimsby
- Leeds Birstall Park
- Rochdale
- Great Yarmouth
- St Helens
- Stockton On Tees
- Perth.
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."
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PA | The high street has been hit with store closures in recent months Multiple landlords are in discussions over restructuring deal including British Land, the Crown Estate and Mike Ashley's Frasers Groups. Councils are also among the stakeholders.
Despite attempts to keep the River Island brand on the high street alive, it is understood there is backlash to the plan with the retailer being accused of expanding too much.
One landlords told The Telegraph: "This is family-run, they've just overstretched, and it's unfair that the landlords will struggle because they haven't maintained their relevance."
The company's bosses are citing the "migration of shoppers from the High Street to online" and higher costs on retail as the primary reasons behind the looming store closures.