High street fashion retailer River Island is at risk of running out of money by the end of August unless landlords and creditors approve a sweeping rescue plan, according to restructuring documents and statements from the company seen by The Telegraph.

The retailer, which employs 5,300 staff in its stores and nearly 1,000 at its West London head office, has proposed closing 33 stores, reducing rents on a further 71 outlets, and writing off a series of debts in a bid to address a severe liquidity crisis. The plan is set to be put before the High Court next week.

If three quarters of River Island’s creditors agree to the proposals, an emergency loan from the company’s billionaire founders, the Lewis family, will be unlocked, allowing the business to continue paying its bills. However, if the plan is rejected, the company has warned it will be “unable to pay its debts as they fall due” and could be forced into administration or other insolvency proceedings.

A report prepared by advisers PwC reveals that River Island faces a £10 million funding shortfall in the second week of September, which could increase to £50 million before the end of the year.

The company has attributed its financial difficulties to “a sharp rise in the cost of doing business over the last few years” and the changing retail landscape, noting that it has “a large portfolio of stores that is no longer aligned to our customers’ needs”.

A spokesperson for River Island commented, “River Island circulated its proposals for a restructuring plan to creditors on June 20. In combination with the company’s ongoing Transformation Strategy, the plan is a proactive measure to place the company on a firm footing. We have been having positive conversations with key stakeholders and are confident that we will achieve approval of the plan in the next few weeks.”

The Lewis family, whose fortune is estimated at £2.7 billion, has agreed to provide a new £40 million borrowing facility through their investment vehicle Blue Coast Capital, contingent upon approval of the restructuring plan. Blue Coast Capital is River Island’s largest lender, with outstanding debts totalling £270 million.

The crisis at River Island comes during a challenging period for the British high street, with the Centre for Retail Research predicting over 17,000 shop closures this year, up from 13,500 in 2024.

---