River Island profits and sales flat in 'challenging environment'

The privately owned retailer, which has 292 stores globally, said operating profits hit £145.8m in the year to December 26 2015, compared with £146.6m in the prior year. 

Sales in the period crept up, from £931.6m in the previous year to £932.7m. A like-for-likes sales figure was not disclosed. 

River Island chief executive Ben Lewis told Retail Week: “They’re a good set of results given the challenging environment in which we operate.”

River Island’s high street fashion rivals have struggled of late with unpredictable weather patterns and the rise of fast fashion etailers such as Asos and Boohoo.

But Lewis added: ”We continue to innovate and invest in our people, the brand and business, and particularly in tech, given the digitally savvy customer we have.”

Lewis said digitally savvy consumer meant that River Island was experiencing strong online and multichannel growth.

Click-and-collect sales rose nearly 40% in the last year while mobile sales rise 30%. More than one third (35%) of River Island customers now use all three channels when purchasing an item.

“Our number one priority for investment is to focus on tech”

Ben Lewis, River Island

River Island opened a tech hub in Shoreditch earlier in the year as part of its bid to put digital capabilities at the heart of its business.

“Our number one priority for investment is to focus on tech,” he said.

“We are very strong as a fashion brand and the fashion remains very important – that is what customers take home and fall in love with. But we want to be known as a digital leader within the industry, and within business generally.”

The competition

Lewis said that he believed customers were “not that loyal to any one brand”.

He added: “We all [River Island and its competitors] continually entice customer on a daily and weekly basis.

“We watch all of the high street and online retailers that our customers shop with. The assumption I make is that anyone can be a competitor.”

Expansion

River Island recruited menswear buying director Nicholas Tahir from Tesco earlier this year.

“We don’t break out individual figures but we are putting lots of effort into evolving our menswear ranges to maintain our position as one of the menswear leaders,” said Lewis. “We are evolving product, moving it on at a pace and we are pleased with how that’s going.”

“While our outlook remains cautious, we are well-positioned in terms of having the right product, and offering a great experience in store and online”

Ben Lewis, River Island

When asked whether River Island would consider standalone menswear stores, which many of its competitors are opening, Lewis said: “We consider anything which is of value to our customers and is going to be profitable.

”As a business it is in our culture, it is our blood, that we are innovative.”

River Island continued its international push last year, opening in Dubai, Saudi Arabia and Chile and Peru last year.

Lewis was reticent about any specific international expansion plans, saying that the retailer was “constantly looking for opportunities to expand” but not shedding any light on future plans.

Looking ahead, he added: “While our outlook remains cautious, we are well-positioned in terms of having the right product, and offering a great experience in store and online.”