‘As it wins approval for restructuring, River Island still faces fundamental questions’

The future of fashion retailer River Island was secured today, after a High Court decision approved restructuring and gave it a fighting chance of revival.

However, it still has an uphill journey to make in a changed environment.

In its pomp, River Island was a fashion innovator. Created by the much-admired entrepreneur Bernard Lewis, it has gone through various phases from Lewis Separates to Chelsea Girl to its current incarnation.

Can it similarly reinvent itself once again, as a proposition if not necessarily under a new name?

As it stands at a fork in the road, there are two possible outcomes – like once-embattled Marks & Spencer, it will rekindle the flame and blaze anew. Or, more like Debenhams in the past, it will limp along and, at best, survive in much-diminished form as the once mighty department store group has as a rebranded Boohoo.

If it can follow the M&S route, a turnaround will probably take time and vision. M&S’ recovery took years and encompassed everything – prices, range, in-store environment, locations, technology, and supply chain. It’s an ongoing transformation, as chief executive Stuart Machin would be the first to point out, and has required constant change across the board.

The court decision may only give the briefest of respites unless fundamentals are fully addressed.

A restructuring of River Island takes place in a difficult environment as retailers bear the weight of increased costs, such as national insurance. While economic growth looks more like a government ambition than a reality, the risk is that retailers will face further cost pressures in the years to come.

“As has been seen in retail before, it’s not impossible to turn around a business in dire straits”

That makes a compelling rationale for River Island’s continued existence and a clear route to long-term profitability all the more important. At the moment, we do not really know what that plan is.

As well as costs, River Island has blamed the online shift for some of its problems. Up to a point, Lord Copper – it’s a shift that has gone on for years.

Certainly, newer names such as Shein and Temu have upset the apple cart. However, other online groups such as Asos and Boohoo have also struggled, so the conclusion must be that River Island’s difficulties run deeper than the rise of online.

In the end, River faces existential questions. Who is it for, why should customers choose it over another retailer, and what model will appeal most to contemporary shoppers?

River Island chief executive Ben Lewis maintained following the court meeting: “We have a clear transformation strategy to ensure the long-term viability of the business, and this decision gives us a strong platform to deliver this.

“Recent improvements in our fashion offer and shopping experience are starting to show results, and the restructuring plan will enable us to align our store estate to our customers’ needs.”

He certainly knows the business, having served as chief executive for years before a break, then returning to that role a few months ago. If anyone knows some levers to pull, it’s him. However, you might also ask why they haven’t already been pulled before now.

As has been seen in retail before, it’s not impossible to turn around a business in dire straits. So good luck to the Lewises as they seek new purpose for River Island, because it will be a big ask.