The River Island Saga
11 August 2025(2025 Aug) – The River Island saga is a stark reminder of the risk run when large landlords relax their investment policies that they apply to small businesses.
Small businesses that are incorporated are normally expected to provide a personal guarantor when leasing premises, yet somehow the same strict approach is not required of multiple retailers. A classic example of investor short-sightedness is the pre-pack. Company x goes into administration whereupon the same directors form a new company and expect the leases of shops they want to keep to be granted to the new co, despite no trading record other than their director(s) responsibility for the insolvency. Of course, it’s rarely publicly accepted that it’s the director(s) fault the company became insolvent. It is always the market. In essence, the fault of customers in having become disillusioned with the retailer’s goods and services, yet not having the common decency to carry on spending regardless.
The writing is always on the wall. But ivory-tower directors are too proud to read it; better at not wanting to listen to anything they don’t want to hear. Bluntly, it’s not the market’s fault, not the fault of on-line or any of the other typical excuses that are rolled out whenever a multiple retailer fails. Always something else’s fault, always someone else’s fault, never theirs. Never the one person(s), in whose control the direction the company has taken, having gone the wrong way.
It is challenging to remain in sync with the ups-and-downs of the market place. It is much easier to come unstuck in times of change, caused simply by whenever the market is booming retailers get carried away by their enthusiasm, over-expand and become over-confident.
I wrote about disconnecting from reality years ago in my newsletter. I also wrote about how to avoid coming unstuck in times of change. Trusting intuition is not rocket-science.
CEOs often say it’s lonely at the top, expected to have all the answers yet no one to talk to. There is plenty of room at the top because the space enables intuition to flourish, free of the doubt others radiate. When you’re at the top, you become a shining light, to be seen from a distance. It’s from afar, from the lone voices in the wilderness that inspiration is derived. Not the ‘yes’ people that surround, only interested in what is, rarely what could be, never do it now. Likely, regular customers of River Island have been wanting to help for months, years maybe, I don’t know, but any failure of River Island’s management to take any notice of the one group of people that could help is insulting.
As for the creditor landlords, that’s what happens when you take a risk. By treating mutiple retailers as if they are more important than they are, landlords do themselves disservice.
I reckon the reason landlords are reportedly annoyed is that the investments were bought with other people’s money – shareholders and borrowing – and now the landlords are faced with the problem of how to repay.
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