River Island plans to close 33 shops in the UK in a move which puts hundreds of jobs at risk. The clothing retailer said more people shopping online and higher costs to run stores were behind its proposals to creditors. It also wants its landlords to cut rents at a further 71 stores which are at risk. The family-owned retailer currently has 230 shops and employs about 5,500 people, but has suffered heavy financial losses. Ben Lewis, chief executive of River Island, said that although River Island is "a much-loved" British high street retailer, more online shopping means it has "a large portfolio of stores that is no longer aligned to our customers' needs". He added that a "sharp rise in the cost of doing business over the last few years has only added to the financial burden". He said a turnaround plan was in place, but restructuring was also necessary. "We regret any job losses as a result of store closures, and we will try to keep these to a minimum," he added. River Island made a £33.2m loss in 2023 after sales fell 19%, according to its most recent set of accounts. The chain said it intends to consult employees over the possible job losses, and will redeploy staff where possible. No head office staff will be directly affected by the proposed closures, a company source said. Creditors will start to vote on the plan on 4 August, and a court will decide whether to approve the plan on 7 August. River Island was founded in 1948 under the Lewis and Chelsea Girl brand before being renamed in the 1980s.
River Island to close 33 shops
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"River Island Announces Closure of 33 Stores Amid Financial Losses"
Bbc News
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TruthLens AI Summary
River Island, a prominent British clothing retailer, has announced plans to close 33 of its stores across the UK, a decision that poses a significant threat to hundreds of jobs. The company cites a shift in consumer behavior towards online shopping and the increasing operational costs associated with maintaining physical retail locations as primary reasons for this drastic measure. In addition to the store closures, River Island is also seeking rent reductions from landlords for an additional 71 locations that are currently at risk. The family-owned retailer, which operates a total of 230 stores and employs approximately 5,500 individuals, has faced substantial financial difficulties, culminating in a reported loss of £33.2 million in 2023 due to a 19% decline in sales. Chief Executive Ben Lewis acknowledged the brand's status as a beloved part of the British high street, yet he emphasized the necessity of adapting to changing market conditions, stating that their extensive store portfolio no longer meets customer needs effectively.
The retailer is committed to minimizing job losses resulting from these closures, with plans to consult affected employees and to redeploy staff wherever feasible. Notably, the proposed closures will not impact head office staff directly. The timeline for the restructuring process is set, with creditors scheduled to vote on the plan on August 4, followed by a court hearing for approval on August 7. This restructuring effort is part of a broader turnaround strategy aimed at stabilizing the company’s financial standing. Founded in 1948, River Island has undergone various transformations, including a rebranding in the 1980s, and it continues to navigate the challenges posed by an evolving retail landscape.
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