Rethinking retail leases: lessons from River Island’s rent crisis 

A warning sign for the high street, and a timely reminder for commercial property stakeholders to take stock. 

River Island, one of the UK’s best-known fashion retailers, has warned it may collapse if landlords do not back a major rent restructuring plan. With around 230 stores and over 5,300 employees, the business has requested rent cuts of up to 75%, or even zero rent in some cases, to help stay afloat. 

While the focus is understandably on River Island itself, this situation carries wider implications for commercial landlords and tenants across the UK. Here’s what you need to know and how to respond. 

What’s happening? 

River Island has launched a restructuring plan that needs the support of its landlords and other creditors by early August. If rejected, the company says it could run out of cash by the end of the month and face administration. 

The proposal involves significant rent reductions for underperforming stores. In return, the business aims to stay open, protect jobs, and avoid the costs and disruption of a formal insolvency process. 

Why this matters for other landlords?

If you’re a commercial landlord, especially one with high street tenants or a small portfolio, this is a red flag. Retailers under pressure are increasingly seeking rent reductions or flexible lease models to survive. 

The River Island case highlights three key risks: 

• Income disruption: Rent cuts of 25% to 75% are difficult to absorb, particularly where finance costs are rising. 

• Vacancy risk: If tenants collapse, finding replacements in the current market may take time, and result in further rent concessions. 

• Lease fragility: Legacy lease terms may no longer reflect the realities of retail performance, making some agreements commercially unsustainable. 

Now is the time to review your lease portfolio, assess tenant covenant strength, and consider whether more flexible arrangements could help preserve long-term occupancy and value. 

What tenants should take from this?

For commercial tenants, River Island’s situation is a stark reminder of how quickly trading conditions can shift. Legacy leases that were viable a few years ago may now be a burden, especially with rising costs, reduced footfall, and economic uncertainty. 

If you're facing similar pressures, consider: 

• Renegotiating lease terms: Explore options like turnover-linked rent or early break clauses during lease renewals. 

• Open communication: Early engagement with your landlord can open the door to practical solutions and avoid more drastic outcomes. 

• Seeking legal advice: If you’re unsure of your rights or options, it’s better to act early. Many restructuring arrangements can be agreed informally, provided they’re legally sound. 

What’s next for the market? 

If River Island’s restructuring plan fails, the ripple effects will be felt across the UK’s retail sector. More closures, vacant units, and debt write-offs could follow, accelerating the shift in how retail space is valued, occupied, and leased. 

We’re likely to see more businesses reassessing their portfolios and seeking flexible space. For landlords, that may mean adapting lease models, working more closely with tenants, and taking a long-term view on occupancy. 

How we can help?

Whether you're looking to preserve income, manage risk, or renegotiate terms, our commercial property solicitors can provide clear, practical advice tailored to your business. 

If you’re concerned about how the River Island case could affect your portfolio, or you’re a tenant looking to future-proof your lease terms, get in touch with our expert commercial property solicitors today.