River Island has published its 2022 financial accounts for its various subsidiaries, revealing an impressive 11.6% surge in turnover during the 53-week reporting period. Known for its River Island branded fashion available in the UK, Ireland, and across the globe, the company initially enjoyed a robust start to the year. However, it encountered hurdles such as waning demand for its fashion products, rising stock levels impacting profit margins, and escalating underlying expenses.
Nevertheless, River Island demonstrated robust cash management, concluding the year with substantial cash reserves. The reported turnover for the year reached £825.8 million, marking a significant increase from the previous year’s £740 million. The additional 53rd week contributed £22.6 million to this growth (2021 had a 52-week reporting period).
Despite the impressive sales growth, achieving higher profits proved to be more challenging. Factors including costs associated with clearing excess inventory and the impact of inflation on merchandise prices led to a decline in gross profit, falling from £128.3 million to £75.8 million year-over-year.
Taking into account the inflation-driven increase in operating costs, operating profit also saw a decrease, plummeting from £73.5 million to £7.4 million. After-tax profit followed suit, dropping from £62.6 million to £5.5 million. Notably, the additional 53rd week had a minimal impact on the profit figures.
River Island remains optimistic about its future outlook. Following the appointment of Richard Bradbury as executive chairman at the beginning of the year, the company has initiated significant transformative measures that are now yielding promising results.
Looking ahead to 2023, River Island is positioning it as a year of transition. This entails a renewed focus on product offerings and the establishment of a new leadership structure, which includes several new senior appointments. The company has also made substantial investments in refurbishing its stores, launching new locations, and relocating specific stores, including its largest-ever store in Manchester Trafford. Additionally, River Island has undertaken a comprehensive reorganization of its digital business and marketing endeavors to strengthen its competitive position.
