Wolverhampton's iconic River Island store at risk as fashion chain seeks rent reductions as part of restructuring plan
Wolverhampton’s flagship River Island store is among those at risk as the beleaguered fashion chain seeks rent reductions as part of a court-approved restructure to turn around its fortunes.
The company laid out a rescue plan before a High Court judge on Friday, August 8, aimed at preventing it collapsing into administration.
The restructure was approved and will result in the closure of 33 stores, with reduced rents sought on another 71 shops.
As part of the rescue plan, the retailer is expected to ask landlords to cut rents for three years and potentially stop payments completely on some sites to try to stem the losses.
According to Drapers, the iconic Wolverhampton store, which has a unique exterior with floor-to-ceiling glass frontages and a distinctive glassed tower, is among 24 sites expected to switch to zero rents - putting its future at risk.
The chain’s outlet at Merry Hill shopping centre in Brierley Hill, Dudley, and its stores in Stafford and at Birmingham Fort are among 38 stores where rent reductions will be sought.
The London-based retailer is expected to impose rent cuts of between 25 and 75 per cent.
It’s understood the chain is also consulting on cutting 100 head office roles as part of its restructuring plan following an earlier round of around 100 job cuts in January.
Matthew Weaver KC, for River Island, told Friday’s court hearing that if the restructuring plan was not sanctioned the “most likely scenario” would be that River Island would “enter into an insolvency process”, the PA news agency reported.
Ben Lewis, CEO of River Island, said after the hearing: “We are pleased that River Island’s restructuring plan has been approved by the High Court.
“We have a clear transformation strategy to ensure the long-term viability of the business, and this decision gives us a strong platform to deliver this.
“Recent improvements in our fashion offer and shopping experience are starting to show results, and the restructuring plan will enable us to align our store estate to our customers’ needs.
“We are grateful to our suppliers, landlords and other stakeholders for their constructive engagement and shared confidence in River Island’s future.”
River Island employs around 5,500 people and was founded in 1948 under the Lewis and Chelsea Girl brand before being renamed in the 1980s.
A staple on the British high street, it has a raft of stores in the Midlands including in Wolverhampton, Walsall, Merry Hill, West Bromwich, Birmingham’s Bullring, Birmingham Fort, Sutton Coldfield, Stafford Riverside and Telford in Shropshire.
