Sep 25, 2019
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Womenswear is River Island's "weak link" says analyst

Sep 25, 2019

River Island’s UK sales drop to £765.6 million in its 2018 financial year is a sign that the company needs to work harder to turn around its womenswear, an analyst said this week.

River Island

Chloe Collins, Senior Retail Analyst at GlobalData, said that the category remains the chain’s “weak link” with a UK market share forecast for 2019 of 1.4%, down 0.2 percentage points since 2016. 

“While River Island has a distinctive and unique design handwriting, with product often heavily branded with ‘RI’ logos, it has failed to maintain appeal by evolving its ranges,” she said. “As it mainly attracts 16-24s, with this age group accounting for 34.4% of its womenswear shopper base, it has been overshadowed by online [labels] Boohoo and PrettyLittleThing, which provide more affordable and faster fashion, with River Island failing to justify its [more] mid-market prices.”

She also said River Island should focus on increasing appeal among 25-34 year-old females “especially as rivals New Look and Topshop close stores, and must add sophistication to its ranges to better compete with Zara.”

“With stronger competition from online pureplays for going-out fashion, River Island could increase its mix of casualwear and also introduce more athleisure styles. Toning down its use of branded logos on product will also help to broaden appeal,” she added.

Her assessment comes after the company said its operating profits fell to just £35.1 million with the margin falling by 4.7 percentage points to 3.8%, due to investments in technological developments and its core customer proposition. 

GlobalData also said that as the retailer’s investment has “disappointingly not yet converted into sales growth, the pressure is on to deliver in FY2019, with new CEO Will Kernan, who joins at the end of September, in need of a solid Christmas trading period – or further strategic overhaul could lie ahead in FY2020.”

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