As the high street fashion chain struggles with challenging market conditions and declining sales, River Island has enlisted the help of PwC restructuring experts.
The fashion retailer, which employs 5,500 people and runs about 230 locations, is preparing a formal restructuring plan that may lead to job losses and store closures.
The action comes after the company started a cost-cutting initiative in January that involved a redundancy program at its London headquarters that affected departments like HR, merchandising, and purchasing.
The company had hired AlixPartners at the time to help increase profitability; however, it is now believed that PwC has taken over this function.
River Island Holdings Limited cautioned in its most recent annual report that the fashion apparel retailing market is rapidly evolving due to consumer desires for more varied, easy, and quick shopping experiences as well as growing competition, particularly in the internet sphere.
The group’s primary business risks are the strains of a fiercely competitive and evolving retail landscape coupled with heightened economic uncertainty.
Numerous geopolitical events have led to ongoing supply chain disruptions, as well as rises in the cost of food, labour, and energy. These factors have also caused inflation and interest rates to rise, which has reduced disposable income and undermined consumer confidence.
If the reorganisation plan moves forward, River Island would be able to avoid going bankrupt by negotiating with creditors including landlords. Other businesses, such as Hobbycraft, have recently adopted the approach.
