River Island has warned it could collapse unless landlords back a restructuring plan that involves closing 33 stores and sharply reducing rent payments. The fashion retailer revealed in documents that it needs £10m in funding by the second week of September, a figure that could rise to £50m by the end of the year.
If the plan to cut rents is not approved through a vote and court hearing expected next month, the company told creditors it could run short of cash by the end of August and be unable to pay its debts. This would make it unable to continue trading and liable to administration or other insolvency proceedings.
River Island blamed its difficulties on a sharp rise in the cost of doing business over recent years and the shift to online shopping, which left it with a large store portfolio misaligned with customer needs. The warning comes despite a strong spring for fashion retailers, following a tough 2024 and start to 2025 as households cut spending on non-essentials.
The company said it has secured £40m in new funding from the investment vehicle of the Lewis family, who founded River Island and still control the business. Its biggest lender, Blue Coast Capital, which holds £270m in outstanding debts, has agreed to an interest rate payment holiday and to extend the repayment date from 2027 to 2028.
A spokesperson for River Island said positive conversations with key stakeholders are ongoing and expressed confidence that the plan will be approved in the next few weeks. The retailer swung to a £33.2m loss in 2023, with sales falling more than 19% to £578.1m, following a £2m profit in 2022. In January, it launched a cost-cutting programme including redundancies at its London head office.
