My evaluation of River Islands Mintel report is that River Islands research proves that it is highly successful selling towards age 18-30 impressionable young males. young males are getting more interested in fashion and keeping them interested is key to keeping a loyal customer base for River Island. To produce a Breast Cancer t-shirt to the River Island customer it has to be Fresh and funky but by adding this shock value to it will create a bigger interest outside River Island customer base. This is needed to compete with is biggest competitor Topman.
STORE PORTFOLIO:
- The chain aims towards teens to young thirties, fashion concious customer.
- Mintels reasearch shows it is hugely successfull in the 15-19 age group.
- With the secong largest market penetration for men buying formal wear for that group at 26% level with Burton and just behind Topman.
- In june 2005 River Island told mintel it had 197 stores in the UK as well as 9 franchise stores in Cyprus, Malta, Poland and Turkey. And ten in the middle east.
MERCHANDISING:
- River Island shop lift is now a very Zaraesque whitebox type approach, with a clean modern minimalist look that gives it quite an up market feel.
- product ranges from a predominately casual with sophisticated to detail, style and colour and River Island is able to chargerelatively high price as a result for instance a two-in-one [fake layered] cotton polo shirt with a print is £19.99, while a crew neck t-shirt with piping is £8.99. a long sleeved casual shirt with frayed stitching getail is £34.99 .
FINANCIAL PERFORMANCE:
- The latest financial figures available relate to 2006, and show robust growth. River Islandis on top form and has re-established its hold on the younger end of the market. The results for 2007 should be equally good.
- Sales, and more importantly profits have improved markedly since 2002. Underlying factors include a more focused product offer and improvements in the store environment and customer communications.
- The majority of the overseas franchised operations are still relatively new, and many have not yet had enough time to become fully established. It may be too early to judge the company’s performance in the new countries yet, but many of them, especially the Middle East ones, seem a good bet.
ADVERTISING AND MARKETING:
- The company is looking incresingly towards P.R as its main source of publicity, withits sponsorshio of graduate fashion week giving it a halo effect. Although it undertakes some print advertising, more importantly it has increasingly successful in generating free editorial copy on the back of the design of its product.
- There were some promotions in conjunction with magazines such as Loaded and FHM.
STRATEGIC EVALUATION:
- River Island is a highly successfull bussiness that is starting to reap the rewards of investment in its stores. productand brand image, with an operating margin that is among the best in the industry. While not immune to the deflationary pressure on the market. It has managed to side step them to a large degree bt enhancing its product design fashion levels.
- from a rather down market image a few yaers ago, River Island has begun to look like an increasingly sophisticated brand and in doing so has begun to appeal to a large number of fashion conscious young male customers. It is therefor well placed to withstand the advance of other chains like Zara offering fast turnaround fashion, as well as to eat into business of established high street brands like French Connection.
- The companys status as privately owned business has enabled it to invest in a long term turnaround rather than going for quick fixes. It is the strategic approach that has enabled it to see through a major repositing of River Island over the past five years.
- Although some of its growth is coming from additional space, much od it through relocations, a considerable proportion is coming through organic, like for like rise in turn over giving very high sales densities. This a robust and profitable form of growth because River Island is not buying extra sales with expensive shop space.
- Unless it loses its touch on design River Island will continue to be successfull because of its focus on providing excellent product at a reasonable premium to its competitors it will be the greatest threat to other retailers in its market that fail to provide interesting, different clothing.