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River Island, a popular clothing retailer in the UK, has announced plans to shut down 33 of its stores, putting hundreds of jobs at risk. The decision comes as a result of the increasing trend of online shopping and the rising costs associated with maintaining physical stores. In addition to the store closures, River Island is also seeking rent reductions from landlords for 71 other stores that are in jeopardy.
Ben Lewis, the CEO of River Island, acknowledged the shift towards online shopping and the challenges posed by the escalating costs of running brick-and-mortar stores. He emphasized the necessity of aligning the company’s store portfolio with the evolving needs of customers. Despite implementing a turnaround strategy, Lewis stated that restructuring was unavoidable due to the financial constraints.
The retailer reported a significant loss of £33.2 million in 2023 following a 19% decline in sales. While the specific locations targeted for closure were not disclosed, River Island indicated that it would engage in consultations with affected employees and strive to minimize job losses by exploring redeployment opportunities. The proposal to close stores is subject to creditor approval with a court decision expected in early August.
Susannah Streeter, a financial expert at Hargreaves Lansdown, noted the challenging retail landscape characterized by increased costs and fierce competition from online retailers like Boohoo, Shein, and Temu. The combination of economic uncertainties, reduced consumer spending, and heightened competition has created a difficult operating environment for traditional retailers like River Island. Founded in 1948 as Lewis and Chelsea Girl before rebranding in the 1980s, River Island faces the daunting task of adapting to the evolving retail landscape to secure its future
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