River Island profits fall as firm invests for future, online surges
Investment spend and changing business conditions dented River Island profits in its latest financial year, a report said on Monday. While the results for the 2017 financial year aren’t due to be filed until later this month, The Telegraph said the retailer’s operating profits fell by over £55 million.
The 40% plunge from £135.7 million to £80.6 million came as CEO Ben Lewis said that stores remain a hugely important part of the business, despite a shift online.
The company has been focusing on its multichannel offer and has been investing in stock, distribution and technology to do this.
But despite this, and against a background of a tough market, sales fell by 3% to £944.5 million, even though the company added eight physical shops in the UK to bring its worldwide estate up to 326 locations. However, Lewis said the company held on to its market share and also grew its online sales.
“Despite some of the challenges we have a strong belief in what we are doing, our brand and product proposition, and we are investing in the changes taking place in consumer behaviours to make sure that we stay at the forefront of customers’ minds,” he was quoted as saying.
There were some bright spots in the results with the company seeing major success for its handbags offer and it reported a 33% increase in sales fulfilled via click & collect, while m-commerce leapt 23%.
Even though online is the fastest-growing part of the business, Lewis stressed that physical stores are key for serving multichannel customers and the firm’s click & collect success certainly underlines that fact.
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