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High street fashion brand River Island has reportedly appointed advisers from PwC to draft a restructuring plan amid tough trading conditions, which could result in store closures and job losses, according to Sky News.
Sources revealed to the outlet that although no definitive decisions have been made about the company’s future yet, the proposals, which need formal approval are likely to be finalised in the coming weeks.
The news follows the group’s decision in January to bring in AlixPartners to help with a cost-cutting and profit-boosting initiative, ahead of the planned tax increases in April. That role has since been taken over by PwC.
However, it is still unclear how many stores and jobs could be affected following this weekend’s announcement.
River Island, which trades from more than 250 stores, has been grappling with significant challenges, including financial and operational risks in recent months.
For the year ended 30 December 2023 River Island posted pre-tax loss of £33.2m. Alongside this, the company’s turnover during the year fell by more than 19% to £578.1m.
In its latest accounts at Companies House, River Island said: “The market for retailing of fashion clothing is fast changing with customer preferences for more diverse, convenient and speedier shopping journeys and with increasing competition especially in the digital space.
“The key business risks for the company are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty. A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence. The company is exposed to a variety of risks including financial, operational, strategic and reputational risks.”
Retail Sector has contacted River Island for comment.
