River Island to Step up International Expansion

Posted on 22 September, 2013 by Kirsten Kennedy

Fashion retailers have enjoyed a profitable relationship with celebrities for quite some time now, whether this involves launching named collections or simply gaining press attention when a celebrity chooses to wear one of their pieces. This trend has certainly worked in the favour of high street brand River Island, with its recent collaboration with pop star Rihanna raising the retailer’s profile with its target market of teenage girls.

The Rihanna for River Island collection launched earlier this year amidst huge interest from the fashion community, and has proven so successful that the retailer has recently launched a follow-up autumn and winter range. Chief executive Ben Lewis spoke of the “tremendous impact” the range has so far had on consumers.

He continued; “It has raised the profile of the brand. It has shown we are fun, fashionable and that we are ahead of the game.”

Certainly, this impact seems to have had positive repercussions for the 2012 financial year. Overall sales rose by 0.4 per cent to £802 million, while pre-tax profits increased by 12.5 per cent, reaching a total of £97.8 million – an impressive result given the uncertain consumer atmosphere of the past few years.

In fact, the outlook for the business has become so strong that River Island now intends to aggressively expand internationally, with its sights firmly set on breaking the American market. This echoes the movements of major rival Topshop, which opened its first US store in 2009 and now owns and operates property in Chicago, Las Vegas, Los Angeles and New York.

River Island currently operates in 14 countries worldwide, with the UK being its primary market. However, the brand recently built a specific website for the Australian market, indicating an interest in pursuing growth south of the Equator.

However, this interest in new markets does not mean that River Island intends to relax on the home front. In 2012 the retailer opened a total of seven new stores, with Mr Lewis hoping to add a further 20 to the portfolio during the 2013 financial year.

Furthermore, in a bid to woo online shoppers the retailer intends to introduce a “click and collect” service to its website, thought to be launching this autumn.

Although 2012’s results certainly indicate a consistent demand for River Island’s collections, Mr Lewis remains cautious about the consumer environment, stating that “it is far too early to say” whether the retail industry has truly entered a period of recovery. However, he insists that the brand will remain dedicated to the UK and its consumers.

He continued; “[The good performance] reflects the investment we have made in the business, and we look forward to further expansion at home and abroad as we build a world-class multi-channel fashion brand.

“The high street is very important to us and we will support the high street.”

With budget rivals such as Primark biting at the heels of more established high street brands, River Island has managed to achieve an excellent set of results amidst an uncertain economic time. Perhaps now is indeed the ideal time for the retailer to capitalise on international markets and take the brand even further afield.

Do you think retailers should be seeking to expand or building up capital reserves as priority?

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