River Island has recorded a decline in earnings after injecting cash into improving the business. The fashion retailer’s operating profit fell from £80.6 million to £35.1 million last year.
In the previous year, profits also declined when money was injected to invest in technology and service. Sales fell from £944.5 million to £919.7 million in the year to December 29, 2018, when River Island’s online and wholesale operations grew.
Meanwhile, River Island’s outgoing chief executive Ben Lewis said: “Despite challenging market conditions, we have maintained our long-term vision to build a resilient business and maintain focus on our customers and their fashion needs.”
“Quite simply, it is more expensive to maintain our level of service to our customers and we have to work harder just to stand still. As we evolve and adapt to our customers’ ever-changing needs, we will continue to invest for the long term in important areas such as product, technology, stores, service and our people.”
Lewis added: “We are seeing continued growth online and with our wholesale partners, and we remain committed to retaining a store presence on the high street, all of which we see as key areas to support growth for the future. Unless rents fall, and they are falling in some places, retailers will close stores or not open. Landlords need to pay serious attention to that. What we’re interested in are fair terms. Then there’s the rates piece – it’s inequitable and not proportionate.”
Lewis will be replaced by Wiggle boss Will Kernan at the end of the month.Lewis’s move from chief executive to non-executive director had prompted some speculation that a sale of River Island may happen, though he denied these speculations.
