Plans for the Russian venture came as the retailer revealed profits down 2.7 per cent to£152.3 million last year, on the back of an 8.4 per cent increase in sales to£727.4 million.
The first Russian store, due to open in Moscow this autumn, will be launched in conjunction with a franchise partner. River Island chief executive Richard Bradbury said he will take a cautious approach to growth in the country.
“We will adopt our normal policy – open a shop, trade it, see how it goes. Russia is a very big market, but it’s also a costly place to do business,” he said. The retailer is also opening its second store in Holland and plans to add a further two in Poland next year to its existing three.
Operating profit as a proportion of sales fell from 23 to 20 per cent. Bradbury said the decline was caused by rising business costs rather than cutting prices and that the company would not cut investment.
“We’ve seen significant cost inflation, but are taking the view that now is not the time to be panicking, so we’re not looking to cut prices or cut spending on shopfitting,” he said.
River Island opened a flagship store at Brent Cross three weeks ago and is due to open a third store on Oxford Street this autumn, when it will also open in Westfield London. It is working with Conchango on a new web site and, in the meantime, has taken the fulfilment of online sales in-house.
Although trading is tough, Bradbury said performance was in line with expectations. “Confidence has been affected,” he said. “At a certain point a young guy has to decide whether to put petrol in his car or buy a t-shirt. His wages can’t be keeping in step with the cost of living.”
Plans for the Russian venture came as the retailer revealed profits down 2.7 per cent to£152.3 million last year, on the back of an 8.4 per cent increase in sales to£727.4 million.
The first Russian store, due to open in Moscow this autumn, will be launched in conjunction with a franchise partner. River Island chief executive Richard Bradbury said he will take a cautious approach to growth in the country.
“We will adopt our normal policy – open a shop, trade it, see how it goes. Russia is a very big market, but it’s also a costly place to do business,” he said. The retailer is also opening its second store in Holland and plans to add a further two in Poland next year to its existing three.
Operating profit as a proportion of sales fell from 23 to 20 per cent. Bradbury said the decline was caused by rising business costs rather than cutting prices and that the company would not cut investment.
“We’ve seen significant cost inflation, but are taking the view that now is not the time to be panicking, so we’re not looking to cut prices or cut spending on shopfitting,” he said.
River Island opened a flagship store at Brent Cross three weeks ago and is due to open a third store on Oxford Street this autumn, when it will also open in Westfield London. It is working with Conchango on a new web site and, in the meantime, has taken the fulfilment of online sales in-house.
Although trading is tough, Bradbury said performance was in line with expectations. “Confidence has been affected,” he said. “At a certain point a young guy has to decide whether to put petrol in his car or buy a t-shirt. His wages can’t be keeping in step with the cost of living.”
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