River Island saw profits dive 40 per cent last year as it piled investment into a modernising its operations amid a rapidly changing market.
In the year to December 2017 River Island saw operating profits drop from £135.7 million to £80.6 million, while sales also dipped three per cent to £944.5 million.
The hole in its profits was reportedly due to growing investment in distribution, technology and stock, as it positions itself to transfer sales from the high street to its online platform.
Ben Lewis, chief executive of the privately-owned fashion brand, assured that the investment was beginning to bare fruit seeing solid online growth and no change in its market share.
“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 said.
“I think we have to as an industry redefine the economic value of a store, not just in terms of the transactions that are taken at the till but the part that it plays in serving customers in this multichannel world.”
“Consumers are changing their behaviours, they are changing their ways of shopping, but in some ways it is a good time to be a retailer if you are positioned nicely to take advantage of the changes.”
Despite adverse conditions on the high street, River Island announced in April that it was set to launch five new flagship stores by the end of the year, stating that physical retail was still an important part of its offering.