The family behind River Island, the High Street fashion retailer, develops a radical rescue plan that could endanger a large number of stores and jobs.
Sky News learned that the owners of the channel have written advisers from PricewaterhouseCoopers (PWC) to develop an official restructuring plan.
The proposals, which should be finalized in a few weeks, are subject to disconnection, with sources insisting this weekend that all firm decisions concerning the future of the company have not yet been taken.
River Island is one of the best-known clothing chains in Great Britain, operating around 230 stores across the country and employing around 5,500 people.
Previously appointed Lewis and Chelsea Girl, the company was founded in 1948 by Bernard Lewis, finally adopting its current brand four decades later.
The accounts for River Island Clothing Co for the 52 weeks ending on December 30, 2023 show that the company made a loss before tax of 33.2 million pounds Sterling.
The turnover of the year fell by more than 19% to 578.1 million pounds sterling.
A restructuring regime is a process supervised by the court which allows companies faced with financial difficulties to compromise creditors such as owners in order to avoid insolvency procedures.
In recent years, it has been used by companies such as the relaxed prezzo catering chain and, more recently, Hobbycraft, the detailer now owned in Modella Capital.
One source said that if he was carrying out a restructuring plan to River Island could emerge in a few weeks.
This weekend, it was not clear how many stores and jobs could be threatened with an official rescue agreement.
In his latest accounts at Companies House, River Island Holdings Limited has warned against a multitude of financial and operational risks for its activities.
“The retail market for fashion clothing is changing quickly with customer preferences for more diverse, practical and faster shopping trips and with growing competition, especially in digital space,” he said.
“The main trade risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty.
“A number of geopolitical events have led to continuous disruption of the supply chain as well as increases in energy, labor and food prices, which causes higher inflation rates and interest rates and leading to lower and lower consumer confidence.”
In January, Sky News reported that River Island hired Alixparters, the consulting company, to undertake work on cost reductions and improvement of profits.
The role of Alixparters is now supposed to have been replaced by that of PwC.
The retailers have complained bitterly the impact of the tax changes announced by Rachel Reeves, the Chancellor, in the budget last fall.
Since then, a well -known group of channels, including Lakeland and the original factory, have been forced to seek new owners.
Poundland, the retail giant at a reduced price, is in the last stages of an auction process, Hilco Capital and Gordon Brothers being interested in acquiring it.
A spokesperson for River Island refused to comment.