River Island at risk of collapse “within weeks” without rescue plan - report

A plan to shut 33 stores, cut rents on 71 more and write off debt is set to be put to the high court next week, the story says.

If this were to be agreed by three-quarters of creditors, then the billionaire Lewis family will unlock a loan that will help the company cover its debts.

The newspaper said the details were included in a restructuring plan put together by PwC. This document reportedly shows that the retailer has a “funding need” of £10m by the second week of September, which will increase to £50m by the end of the year.

A company spokesman told The Telegraph: “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.”

Other details in the report include more than 30 company cars on loan through a vehicle leasing scheme being handed back. At stores not being closed, the rent cuts being asked for are in the region of 25% to 75% over a three-year period. Owners of 24 stores are said to be set to receive a request for zero-rental payments.

River Island’s move to restructure has now been going on for months. Several boardroom changes have also taken place this year, with Ben Lewis returning as chief executive and Suzy Slavid taking the role of trading managing director.

The documents reportedly show that Blue Coast Capital is River Island’s largest lender, with debts of £270m outstanding.