Troubled retailer puts 100s of stores at risk after drastic move
The retail chain is attempting a massive turn around plan.
One of the hardest things for a retailer to do is admit it needs help.
This is especially true for once-popular retailers.
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These store brands might have had their days in the sun a decade or two ago and often find it difficult to accept that customer tastes have changed.
Maybe that means that their brand is no longer the favorite among teens, young adults, or other competitive cohorts. Perhaps it's over-expanded and now must scale back growth to recapture some of the scarcity that seems to make customers flock to a brand. Or maybe it's cash-strapped for whatever reason, and it needs to call in a group of professionals to help right the ship.
In fashion, however, the situation is often more dire — and more complicated — than it may initially seem. Image source: Getty
Clothing stores are hard to run
Fashion and clothing stores are particularly vulnerable to the changing whims associated with customer behavior.
What might have been considered on trend or in vogue a year or two ago is subject to change.
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Social media, entertainment television, and an increasingly connected world have accelerated fashion trends (which typically already change at a rapid clip).
Now, most fashion brands — which try to anticipate trends for seasons ahead of time — must try to predict what might be considered cool months in advance.
And with the rise of fast fashion brands, which can churn out inventory faster than most competitors, this is getting harder to do.
Popular clothing store makes big change
And now, the popular fashion store River Island is getting a crash course in changing consumer tastes.
The UK-based brand has enlisted business strategy and accounting firm PricewaterhouseCoopers (PwC) to help it formally restructure.
The move will take a square look at its approximately 230 stores and 5,500 employees to determine where there may be inefficiencies or financial vulnerabilities.
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The restructuring effort does not include any sort of bankruptcy, but underperforming stores may be subject to closure depending on what the company finds.
"The proposed rescue deal is expected to utilize a court-sanctioned restructuring mechanism, allowing the chain to renegotiate with creditors such as landlords — an increasingly common strategy among troubled UK retailers," Northern Ireland World reports.
Stores in the following areas have been called vulnerable:
- Telford, England
- Gloucester, England
- Cheltenham, England
- Around 20 in Scotland
Last fiscal year, which ended in December 2023, River Island posted a £33.2 million pre‑tax loss.
