River Island Faces Significant Losses, Embarks on Restructuring Path Through 2028

River Island closes 2024 with a sharp deterioration in its results. In the year prior to the restructuring it has implemented, River Island Holdings Limited posted a pre-tax loss of 124.3 million pounds ($165.6 million), compared to 32.2 million pounds ($42.9 million) a year earlier. The British fashion retailer also reduced its turnover to 690.1 million pounds ($919.5 million), which contrasts with the 701.5 million pounds ($934.7 million) achieved in the previous year.

Gross profit also fell to 37 million pounds ($49.3 million), compared with 46.7 million pounds ($62.2 million) in 2023. The group’s net loss stood at 138.4 million pounds ($184.4 million) for the period, after a loss of 24.4 million pounds ($32.5 million) in the previous year.

By 2023, the company had gone from a profit of 7.5 million pounds ($9.9 million) in 2022 to pre-tax losses of 32.2 million pounds ($42,9 million), with turnover down 15.1%. In the presentation of these accounts, the group defined 2023 as a reset year for the business, with a new leadership structure, and said that customers were reacting positively to the changes.

River Island is in the midst of a restructuring process to get out of the red

The company also points to a “significant” increase in inflation on cost of goods sold, which reduced gross margin and led to a 20.8% drop in gross profit. This was compounded by inflationary pressures on operating costs, with a 7.6% rise in personnel expenses and an increase in distribution and administration costs, the British company explains.

Against this backdrop, the company has implemented a restructuring plan that was approved in August. The scheme includes adjusting the size and profitability of the store network and has new financing secured until 2028, while working on optimizing its store estate, growing comparable sales with improved margins and investing in growth and productivity.

Ben Lewis has returned as group CEO, having led the business for nearly a decade prior to his departure in 2019. According to River Island, “significant” results are already being recorded from the strategy and the company expects improved profitability in the current financial year, details of which will not be known until the next filing of accounts with the UK Companies House.