River Island is reportedly the most recent retailer to potentially undertake a company voluntary arrangement (CVA) or other form of administration due to the effects of the Covid-19 pandemic.
The fashion company is considering the move in an attempt to close or cut rents on some of its 300 stores, according to Retail Week.
River Island executives are reportedly concerned about going through with the process due to the retailer’s stable financial situation.
In early July, it was reported that River Island was planning to axe around 250 head office roles as part of cost-cutting measures. CEO Will Kernan told employees in a letter, seen by Drapers: “The pandemic will change our marketplace for years to come, so we have acted quickly to reassess our structure, affordability and strategy. As a business we need to be more flexible and, critically, we must remain financially viable despite the potential of significantly reduced sales in the short term.
“I am sorry to have to share this news and I know that the next few days will be unsettling for everyone. This is a hard decision that I am saddened to make, but it is a necessary one to ensure a sustainable future for this business and our remaining teams as we reset our ambitions.”
Photo credit: River Island