River Island to close 33 shops

River Island is set to close 33 UK shops in a move that puts hundreds of jobs at risk.

Clothing retailers said the higher costs of more people shopping online and running the store lies behind the proposals to creditors.

They also hope that landlords will cut rents at another 71 risky stores.

The family-owned retailer currently has 230 stores and employs around 5,500 people, but suffers from heavy financial losses.

River Island CEO Ben Lewis says that River Island is a “very beloved” high street retailer in the UK, but the high amount of online shopping means there is a “large portfolio of stores that no longer meet customer needs.”

He added: “The sharp rise in the costs of doing business over the past few years only increased the financial burden.”

He said that a turnaround plan is in place but there is a need for a restructuring.

“We regret unemployment as a result of the closure of our stores and we will try to minimize these,” he added.

River Island suffered a loss of £33.2 million in 2023 after a 19% decline in sales, according to its latest account set.

They refused to say which stores were planning to close.

The chain said it intends to consult employees about possible unemployment and is intended to redeploy staff whenever possible.

According to company sources, no head office staff will be directly affected by the proposed closure.

Creditors will begin voting for the plan on August 4th, and the court will decide on August 7th whether to approve the plan.

River Island was founded in 1948 under the Lewis and Chelsea Girl brands and was renamed in the 1980s.

Susannah Streeter, head of funds and markets at Hargreaves Lansdown, said it was “not really surprising” that River Island proposed closing the store, given the pressure being underway.

She said recent changes in employer national insurance contributions have increased costs for retailers like River Island, with numerous physical stores.

There is fierce competition in fashion retailers not only from things like Boo Hu, but also from relative online rookies such as the Chinese giant scene and Tem.

These “a much cheaper retailers with fingers in the pulsating fashion” are making things really difficult in the sector, she said.

She said retail sales and consumer confidence have declined as households cut to try to cope with inflation.