River Island looks back for profit

HIGH Street fashion chain River Island has been going back to the future this year with Fifties glamour styles and a vintage denim look.

The company hopes to bring a new gloss to its profit figures after enjoying a huge sales boost in 2003 for very little return.

Accounts filed last week by the family-owned Lewis Trust Group showed retail turnover up 7.3% at £406m, but pre-tax profits were fractionally reduced at £55.7m in the year to December.

The Lewis family, whose wealth is estimated at £560m, did not take a dividend, having collected a £30m payout from River Island the previous year.

River Island has a 1.4% share of the womenswear market, lying in 13th place alongside Oasis, according to market research from Verdict. Marks & Spencer leads with 13.5%.

Verdict's Andrea Cockram predicted that profit margins would be squeezed further, but the increasing trend for dressing down would hit the formal fashion houses harder, with River Island being squeezed between more powerful brand names and supermarkets driving down prices.

'It is privately owned,' she said, 'so a one-off hit on profits is not as big a problem as it is for Marks & Spencer, which answers to shareholders.'