Sales edge up but profits plummet at River Island

The retailer said that the combination of costs to clear excess stock and cost of goods inflation resulted gross profit to fall by 69% year on year to £75.8m.

Accounts filed on Companies House for River Island Holdings Limited show that profit after tax fell by 91% year on year to £5.5m. Having started the year well, the business said it “subsequently suffered from both falling demand for  fashions and rising stock levels, which affected margins, whilst underlying costs rose.”

Richard Bradbury was appointed as executive chairman at the start of this year. River Island says that as a result of this, “significant changes have been made which are starting to bear fruit, although this year is planned to be a year of transition. Product ranges have been refocused and a new leadership structure has been developed with new senior hires.”

River Island closes the year with £110.9m in cash, compared to £159.6m for the same period in 2021. It has a net assets position of £226.6m, an increase from £216.7m in 2021.

The business states it has invested significantly in shop refits, with some new stores/resites (including the largest store to date in Manchester Trafford) and the digital business and marketing have been reorganised.

The retailer has over 300 stores in the UK, ships to 125 countries around the world and employs nearly 8,000 staff.