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River Island operating profits dropped by 90% year-on-year to £7.4m, despite turnover rising 11.6% year-on-year to £825.8m for the 53 weeks ended 31 December 2022.
The retailer attributed a combination of costs to clear excess stock and cost of goods inflation on the gross profit fall of 69% year-on-year to £75.8m.
According to accounts filed on Companies House, profit after tax fell by 91% year-on-year to £5.5m, which was attributed to both falling demand for fashions and rising stock levels.
It also noted that while the company started the year well, the challenging market conditions affected margins, whilst underlying costs rose.
As a result, the retailer closes the year with £110.9m in cash, compared with £159.6m for the same period in 2021. Its net assets position also sits at £226.6m, an increase of £216.7m in 2021.
Richard Bradbury, executive chairman of River Island, said: “Significant changes have been made which are starting to bear fruit, although this year is planned to be a year of transition. Product ranges have been refocused and a new leadership structure has been developed with new senior hires.”
The retailer reported that it has invested “significantly” in shop refits, while the digital business and marketing have been reorganised.
River Island operated over 300 stores in the UK, ships to 125 countries around the world and employs nearly 8,000 people.
