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A High Court judge will decide the future of River Island this week after a rescue plan for the company did not secure full support from its landlords and lenders.
According to The Telegraph, River Island is looking to shutter 33 stores, slash rents on a further 71 shops and write off a series of debts, including business rates to councils.
The retailer has reportedly warned it could run out of money by the end of the month if it cannot avoid payments to creditors.
The Times said it understood that not all creditor classes approved the restructuring plan, meaning the final approval will rely on the judge’s ruling at a sanction hearing on Thursday (7 August).
According to The Telegraph, around 80% of River Island’s creditors by value chose to support the plan in a vote held last week. However, it did not secure 75% of the vote in every individual class of creditor, with some landlords resisting the plans.
Of the stores River Island is not proposing to close, it is aiming for three-year rent cuts of between 75% and 25%, with owners of 24 shops being asked to accept zero rental payments.
A spokesman for River Island told Retail Sector: “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 coming days.”
One landlord previously told The Telegraph: “This is family-run, they’ve just overstretched, and it’s unfair that the landlords will struggle because they haven’t maintained their relevance.”
River Island has been contacted for further comment.
