River Island ‘positive’ about future despite £30m losses

High street retailer River Island has slipped into the red with a £30m loss before tax as it struggles to hold up against online competition and rising costs.

The company reported a loss before tax of £32.3m in 2023, down from profit of £7.5m in 2022, according to newly-filed accounts with Companies House.

Turnover fell 15.1 per cent to £701.5m, from £825.8m in 2022, while earnings before interest, tax, depreciation and amortization (EBITDA) fell by 146 per cent, from profit of £26.5m in 2022 to a £12.5m loss in 2023.

The retailer blamed its struggles on a combination of higher operating costs “primarily due to wage price increases” and difficulty adapting to the modern retail landscape.

River Island said there was a “customer preference for more diverse, convenient and speedier shopping journeys with increasing competition, especially in the digital space”.

E-commerce firms like Shein have shaken up the industry, with cheap offerings appealing to the fast-paced fashion trends of social media.

River Island, which has traditionally been a high street store, also particularly struggled during the pandemic – during which e-commerce firm like Shein boomed – and closed a number of stores during the lockdowns.

During 2023, the company was also affected by a reduction in sales, the cost of clearing excess stock, and the ongoing shopping crisis in the Red Sea, it added.

However, the retailer said it remained “positive” about the future and described itself as undergoing a “year of reset”, with refocused product ranges and a shake-up of senior leadership.

“The business has invested in customer proposition – with stranger product ranges, an enhanced shopping environment in stores and an elevated digital experience,” it said, adding that customers have already begun to react well to the changes.

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