If the landlord refuses to reorganize the plan, there is a risk of collapsed river islands
River Island warned that unless landlords approve a proposed restructuring plan, the plan could close 33 stores, significantly reduce rents and require at least £10 million in funding in September.
In documents detailing the plan, which debuted in June – the high street fashion retailer told creditors that unless the proposal passes, it could run out of cash by the end of August, leaving it unable to repay its debts when it falls. Voting is expected next month for proposals and court hearings.
Without landlord support, Ha Island said it will no longer be able to continue to worry and will be forced into government or other bankruptcy proceedings.
The company blames its deteriorating finances on “a sharp rise in business costs” and a continuous shift to online shopping, which has led to its existing store real estate and customer behavior lapses.
High Street staples traded from more than 200 stores, although spring deals briefly recovered, the weather has become warmer. This rise rate comes after the tough times in 2024 and early 2025 when UK households cut priorities for essential items such as food and energy bills.
River Island reported a loss of £33.2 million in 2023, reversing a £2 million profit in 2022. Sales fell 19 per cent to £578.1 million.
The restructuring plan includes £40 million in new funding from the Lewis family’s investment vehicle, which continues to control the business. In addition, River Island’s largest lender, Blue Coast Capital, has agreed to temporarily waive interest payments and extend the maturity date by £270 million in outstanding loans from 2027 to 2028.
A Kawashima spokesman said the discussion with stakeholders was “positive” and that the company was “confident that we will achieve approval of the plan in the coming weeks”.
In January, retailers implemented a cost-cutting plan that included layoffs at their London headquarters, affecting sectors such as purchasing and sales.
River Island began with the Lewis deal in the 1940s and later the Chelsea girl, the latest in a range of high street retailers, experiencing rising costs, falling scattered volumes and tight struggling with consumers’ belts. The company has long been a staple in UK streets and shopping malls, targeting young fashion consumers.
The retailer’s plight echoes Poundland’s plight, which recently announced its own restructuring plan. The proposal could result in up to 150 stores closures, the closure of two distribution centers and the end of online operations, putting 2,000 jobs at risk.
If River Island cannot get creditor support, it could be the latest casualties in the retail sector under constant pressure. Its possible collapse will allow shock waves to pass through the UK’s fashion industry and retail employment landscape and further accelerate the decline of the physical streets in the pandemic era.
