River Island rescue plan gets court approval, what now?

River Island has secured the much-needed green light from the High Court for its rescue plan, allowing it to move forward with proposed store closures and begin the search for fresh funding.

With the court’s backing, the retailer now has the go-ahead to close 33 UK stores and cut rents across an additional 71. From landlords, it will also request cuts or suspensions on certain rents. The decision does not impact the company’s stores in Ireland.

In the court hearing and associated documents, it was revealed that River Island employs around 6,250 staff members, 5,000 of which serve as store employees. A total of 122 will remain “unaffected”.

The business is also seeking 54 million pounds in new funding to stabilise its balance sheet.

Last month, River Island had campaigned to creditors to vote in favour of the plan, claiming it could collapse “within weeks” if its “radical” proposals were not approved.

Ultimately, just half of its creditors approved of the strategy, below the three quarters needed for its initial approval, thus passing the decision onto the High Court. No one appeared in court on August 8 to oppose the proposals.

Following the creditor meeting, which took place August 1, partner of landlord Grosvenor, Michelle Quinn, had said the outcome of the vote “was expected”, noting that it was a "hefty rent cut for some landlords”. Quinn recognised the struggles facing high street retailers, highlighting the waning interest from young people for brick-and-mortar stores.

Quinn added: “If landlords keep pricing high rates, it’s just not conducive to a thriving high street, unfortunately.”

Tensions could build as lack of transparency between landlords and retailers rises

These struggles were also touched on by Matthew Weaver KC, a representative for River Island, who told the High Court on Friday that the company “simply has not been able to reverse” its financial difficulties, the Independent reported.

In his submission, Weaver cited issues like declining footfall and sales due to the “highly competitive and changing retail environment as well as the prevailing trend away from high street retail stores to online shopping”.

There is a chance that the decision may be challenged by disgruntled landlords, many of which are facing similar issues of potential closures and rent cuts with other retailers tackling financial setbacks. Commercial property owner British Land, for example, is said to have appointed lawyers to look into the rescue deals of both River Island and its high street counterpart Poundland, which is also planning to close a number of stores.

Experts say that creditors looking to potentially appeal the decision may be wary in light of less than favourable outcomes in recent similar cases.

“It is possible that the dissenting creditors could yet seek to appeal the court’s decision to sanction the plan, particularly in light of the damaging precedent this decision sets in relation to cramming down commercial landlords,” Lucy Trott, managing associate and insolvency expert at Stevens & Bolton said.

Trott added: “Restructuring plans ‘appear to be the new ‘flavour of the month’ for retailers who previously sought to restructure their debts, particularly their rent obligations, under CVAs in a similar manner.”

Elsewhere, the growing lack of transparency between landlords and retailers is becoming of increased concern. Mark Bruce, data and insights director at Kinexio, a platform for commercial property management, said: “The fact that Restructuring Plans are being used to close stores and cut rents underlines there is still a lack of transparency between some landlords and retailers on how stores are performing.

“In a sector as dynamic as retail there should be real-time analysis of sales performance data to support more flexible lease models whereby rents can be adjusted quickly according to trading conditions. Complex insolvency measures such as CVAs and Restructuring Plans should not be needed to close underperforming stores.”

Responding to the discourse, Weaver stated there “may well be an attempt by [creditor landlords] to extract value from the plan company by taking a ransom position”, as quoted by the Independent.

He added: “In essence, the transformation plan seeks to address the root causes of the difficulties facing the group and to reposition River Island for long-term success. It involves a combination of operational improvements, cost rationalisation and strategic investment, all of which are critical to restoring profitability, improving cash flow, and safeguarding jobs.”

River Island’s financial struggles became most prominent in 2023, when it posted a pre-tax loss of around 32.2 million pounds, while turnover fell 19 percent. In early 2025, it appointed AlixPartners to advise on cost-saving strategies and had set about cutting jobs, impacting divisions like buying and merchandising.

By June, the retailer had assigned PwC with the task of drawing up a formal restructuring plan, after citing “the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty” as key business risks in a financial report.