River Island is at risk of collapsing into administration within weeks unless creditors approve a radical restructuring plan, putting hundreds of jobs and the future of several Scottish branches in jeopardy.
As part of the rescue strategy, River Island has confirmed that six stores across Scotland are scheduled for closure. They are:
- Edinburgh (Princes Street)
- Falkirk
- Cumbernauld
- Kirkcaldy
- Kilmarnock
- Perth
These are among 33 stores across the UK earmarked to shut, with another 71 branches facing reduced rent agreements or further risk depending on ongoing talks.
River Island’s restructuring proposal is set for a key creditor vote on August 7, and seeks to close unprofitable stores, cut rents, and write off certain debts.
If 75% of creditors, mostly landlords, agree, a multimillion-pound emergency loan from the Lewis family (the company’s owners) will be unlocked. If not, the retailer has warned it could “run out of money by the end of August,” be “unable to pay its debts as they fall due,” and be “subject to administration or other insolvency proceedings.”
River Island currently employs about 5,500 people across the UK, with hundreds of jobs at immediate risk in Scotland due to the closures.
A spokesman for River Island stated:
“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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Ben Lewis, chief executive of River Island, directly addressed the Scottish situation, saying:
“The sharp rise in the cost of doing business has added to the financial burden the company faces. We have a clear strategy to transform the business to ensure its long-term viability… It is only with a restructuring plan that we will be able to see this strategy through and secure River Island’s future as a profitable retail business. We regret any job losses as a result of store closures, and we will try to keep these to a minimum.”
If the plan fails, additional Scottish branches could be under risk, as a further 71 UK stores may face rent negotiations or ultimate closure.
