High street fashion brand River Island has hired PwC to advise on a formal restructuring plan as it faces falling sales and tough trading conditions. The high street fashion chain, with around 230 stores and 5,500 staff, may close stores and cut jobs. This follows earlier cost-cutting efforts, including head office redundancies in January. PwC replaces AlixPartners, previously brought in to boost profitability.

The UK retailer is finalising proposals, with a court-supervised process possible in the coming weeks. River Island posted a £33.2m pre-tax loss for 2023, with revenue down 19% to £578.1m. It blamed falling sales, store investments, and ongoing economic pressures including inflation, supply chain disruption, and weaker consumer confidence.

If implemented, the plan could help River Island secure deals with creditors and avoid insolvency. The move comes amid wider instability in the retail sector.

Read more at Retail Gazette

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Despite strong 2024 profits and record sales, Volvo is set to cut around 3,000 jobs globally - 1,200 employee roles and 1,000 consultant contracts in Sweden, as part of an SEK 18 billion (£1.39bn) cost-saving plan. The move aims to lower costs amid rising pressures from electrification investments, macroeconomic uncertainty, and supply chain issues. The cuts represent about 15% of Volvo’s global office-based workforce. 

President and CEO, Håkan Samuelsson, said “These have been difficult decisions, but they are important steps as we build a stronger and even more resilient Volvo Cars.” 

The reorganisation aligns with Volvo’s push to become fully electric and is expected to be complete by Autumn 2025, with financial benefits anticipated from Q4 2025.

Read more at Automotive Management

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Last week Poundland announced a major restructuring which involves extensive store closures and job losses. The budget retailer is embarking on a significant turnaround plan, including the closure of 68 stores, putting well over 1,000 UK jobs at risk. Two distribution centres in Darton and Bilston are also destined for closure. Further store reductions, potentially around 70, may occur due to lease expirations and sought-after rent reductions.

Recently sold for just £1 to US investment firm Gordon Brothers, Poundland aims to revive its struggling performance. The plan, awaiting court approval, seeks to secure the future of the remaining workforce and stores. As part of the overhaul, Poundland will stop selling frozen food and cease online orders, focusing instead on essential groceries and expanding its womenswear and seasonal merchandise. The company, which serves over 20 million shoppers annually, acknowledges the need for drastic action to return to growth after a lengthy period of underperformance.

Read more in this BBC report

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Swiss solar panel manufacturer Meyer Burger Technology's German subsidiaries, Meyer Burger (Industries) and Meyer Burger (Germany), have filed for insolvency after unsuccessful restructuring efforts. This affects 620 employees across solar cell production in Bitterfeld-Wolfen and mechanical engineering in Hohenstein-Ernstthal. Efforts to continue operations will proceed under insolvency proceedings.

This follows Meyer Burger's request for an extension to present 2024 financial results amid ongoing financing talks. While Swiss operations continue, Meyer Burger (Americas) laid off all 282 employees and halted production at its Goodyear, Arizona, facility due to funding and raw material shortages, casting uncertainty on its future. Meyer Burger is still negotiating with bondholders for restructuring.

Full story here

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Frasers Group is nearing a takeover of troubled Norwegian sportswear retailer XXL ASA, having secured over 92% of its share capital and 90% of voting shares. Despite this, Frasers has issued stark warnings, emphasizing XXL's "significant distress" and uncertainty about its rescue.

Frasers stated that saving XXL, which operates 85 stores across Norway, Sweden, and Finland and employs over 4,000 people, will require collaborative effort from all stakeholders. The Sports Direct owner expressed concern that XXL's financial position has deteriorated, partly due to a lack of support from major shareholders who previously turned down Frasers' earlier offers to help stabilise the business. They state that “there is no guarantee that XXL can be saved in its current form or at all.”

Read more in Retail Gazette

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