River Island invests heavily in tech to drive growth

By

Sandra Halliday

Published
Sep 21, 2017

River Island saw lower operating profit last year even though sales rose and it blamed that familiar scenario, the “challenging” retail environment.

The company’s turnover rose 4% in the year to December 31, reaching £970.5 million and not far short of the magic £1 billion figure. But operating profit dropped 7% to £135.7 million at the family-controlled firm.

But lower profits weren’t necessarily about margin issues as the company invested heavily for growth in product and in boosting both its digital and physical store offer.

The company expanded its women’s men’s and kidswear offer while opening new stores in the UK and abroad and ramping up its tech.

CEO Ben Lewis said: “Against a challenging backdrop, the last 12 months have seen stable trading. The consumer outlook remains uncertain but … we are well positioned to deliver further progress against our strategic goals and remain confident that we are building the right store portfolio, product and digital capability as we continue to invest for growth.”

The Lewis family members didn’t pay themselves a dividend this time, the second year they’ve opted to plough that money back into investment. And that will mean a significant new number of jobs at the firm. As well as new shop-floor staff, a doubling in size of its Shoreditch tech hub is on the cards and the tech team will go from around 100 people to three times that number as e-commerce is prioritised.

Omnichannel counts too, of course. Tech enhancements for the company include linking with Google to check whether River Island stores nearby have the items shoppers want in their size. The recent Ampersand 2017 Mobile Retail Report showed customers like this feature but only 30% of retailers currently offer it.

As reported previously, the company is also taking a deep dive into artificial intelligence/machine learning and this helped mobile sales to rise 21% last year against a much lower rise overall.