Wednesday 7 December 2016

River Island profits surge almost 70pc on back of childrenswear debut

Ashley Armstrong

Published 18/09/2015 | 07:53

River Island was helped by consumers shopping on mobiles.
River Island was helped by consumers shopping on mobiles.

Profits at River Island surged by almost 70pc last year on the back of its childrenswear debut and the rise of consumers shopping on mobiles.

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Profits at River Island surged by almost 70pc last year on the back of its childrenswear debut and the rise of consumers shopping on mobiles.

The fashion retailer launched River Island Mini, a range of clothes aimed at claiming a slice of the £4.6bn UK childrenswear market, in April. River Island is the latest retailer to cash in on the trend of parents dressing their children in the same style as them, and often spending similar amounts on outfits.

Profits rose to £149.1m compared with £88m the year before, on the back of a 10.4pc rise in sales to £925.8m in the year to the end of December 2014.

The lift in profits comes after the family-owned chain invested heavily in opening flagship stores in the UK and abroad and in its IT systems, which caused a 10pc dip in profits the year before.

Ben Lewis, chief executive of River Island, said that the investment was paying off and reported a 48pc increase in mobile traffic to the group’s website and a 32pc lift in click and collect sales.

Mr Lewis said the retailer was tapping into the shift in customer behaviour to shop on-the-go and said that the demand for River Island clothes was driven by men and women who liked their “fashion with a unique twist”.

“We don’t have a target age demographic but we are focused on those who are young in attitude”, Mr Lewis said. The retail chief said that its international expansion was evidence that there was support overseas for British fashion.

In addition to 248 stores in the UK, River Island also has shops in Sweden, Holland, the Middle East, Malta, the Philippines and South Africa as well as recently opening stores in Chile and Peru.

Mr Lewis shrugged off the overseas economic slowdown, which has caused headaches for numerous global retailers, and said that River Island was more focused on developed markets than emerging markets and had no exposure to China.

He also took a measured approach to the Government’s new living wage legislation, saying: “We believe in paying our employees a fair wage.

“It’s not that different to the other cost pressures retailers face. It’s not a dramatic thing, it’s coming and we will plan for it.”

Last year, River Island sales were boosted by a tie-up with Rihanna, the singer, although the collaboration range has since ended after a one-year agreement. Mr Lewis said that River Island was “keeping its options open for further celebrity collaborations”.

River Island was started by Mr Lewis' uncle, Bernard Lewis, who started selling knitting wool from The Wool Shop on an east London bomb site.

The retailer gained nationwide popularity in the 1960s when it was rebranded as Chelsea Girl and brought low-cost fashion to the high street. The company changed its name to River Island in 1988 when Chelsea Girl and its menswear brand Concept Man were brought under one roof.

Telegraph.co.uk

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