River Island sets sights on profit after losing almost £125m
River Island lost almost £125m in the year before being saved from the brink of administration, it has been revealed.
The high street retailer’s restructuring plan, which was approved in August, involved 33 stores being closed with the loss of hundreds of jobs.
The proposal also included rents being reduced – some to zero – and the writing off certain debts.
At the time, River Island said it was making redundancies across its head office with expected savings of £8.1m a year.
At the High Court hearing, River Island said it was “running out of cash”, with assessments indicating it could only operate until the week commencing 8 September.
Now, new accounts filed with Companies House have revealed the full extent of River Island’s financial situation in 2024.
For the 12-month period, River Island posted a pre-tax loss of £124.3m, having also lost £32.2m in 2023.
Its turnover also decreased in the year from £701.5m to £690.1m.
In the results, River Island said its restructuring plan had an impact on its 2024 as a result of a non-cash provision of an intracompany loan of £80.4m.
It also had an £516m impairment on the asset value of its investments in subsidiaries.
River Island bosses ‘expect a significant improvement in profitability for 2025’
In a statement signed off with the accounts, River Island said: “Post restructuring plan, the group has a new and secure financing facility until 2028 with no cash interest servicing costs, a reduced store base with increased profitability per store, and a significantly reduced administration and distribution cost base.
“In parallel, the group has been executing a wider business transformation plan during 2025 to reduce costs, improve margins and increase sales.
“Together, these changes will allow the business to return to profitability.”
On the impact of its restructuring plan, River Island said: “The plan enables a step change in the size and profitability of the retail estate and secures long-term funding to ensure there is sufficient cash to deliver the plan.
“The business sis already seeing significant returns on this strategy.
“Gross margin percentage is greatly improved, costs are significantly reduced and the underlying sales in the retail estate have returned to growth.
“The directors expect a significant improvement in profitability for 2025 and are confident that the new funding, improved strategy and reduced costs and smaller and more focused store estate will all benefit the group’s trading.”