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RIVER ACROSS THE CHANNEL

MID-RANGE FASHION RETAILER RIVER ISLAND PLANS TO OPEN NEW STORES ACROSS EUROPE

By Mark Faithfull

Think of the big hitters in the U.K. value and mid-fashion market and such names as Next, New Look, Primark and TopShop probably come to mind. River Island might not spring so immediately to mind, and yet, having become one of the U.K.’s most successful fashion chains, it is primed to take on the likes of Inditex and H&M with an aggressive European expansion drive.

The private chain’s pretax profits rose about 10 percent to about $316 million last year. Sales were up, at $1.21 billion, according to reports.

Richard Bradbury, the managing director, declined to confirm those figures, and River Island is not required to publicize its data. But he did talk about the chain’s plans to open stores across several European markets. In January of last year River Island opened its first company-owned store in the Netherlands, a 12,700-square-foot store on Kalverstraat, in Amsterdam. The street is home to such chains as Diesel, H&M, Mexx, Miss Sixty and Zara.

Bradbury says the chain plans to open stores in important shopping centers in Austria, Belgium, Germany, Luxembourg, the Netherlands and Spain. “There is no limit to the number of stores we can open, but it’s a question of finding the right properties,” he said. “We’re interested in being in all the big cities in the countries we’re targeting.”

River Island is set to open its first store in Spain, a 6,780-square-foot unit on a street that intersects with Barcelona’s important Portal de L’Angel shopping avenue. The company chose the area because of its high footfall and its domination by youth fashion brands.

“Spain is a maturing, highly competitive market, and many international retailers, particularly fashion chains, already have a presence there,” said Peter Gold, CB Richard Ellis’ head of cross-border retail for Europe, the Middle East and Africa, who represents the retailer. “It was imperative that River Island’s debut location offered the best possible combination of target footfall and prestige. Portaferrissa offers both.”

Besides its company-owned store, River Island has 26 overseas franchise stores and plans to open more. The Alshaya Group operates some of these, across eight Middle East markets; others are in the hands of Ultimate Fashion, Poland. River Island opened a 10,000-square-foot store in Singapore’s VivoCity mall at the end of January and a 6,800-square-foot store at Raffles City Shopping Centre, on Singapore’s Orchard Road, at the end of May. Both centers are owned by Singapore’s CapitaLand Group. A third Singapore store and three in Kuala Lumpur, Malaysia, are also slated to open this year.

“When we decided to enter the Asian market, we felt that Singapore would be an excellent springboard to other parts of Asia, given the cosmopolitan culture,” said Bradbury. “The boundaries have changed in fashion retailing and we’re being very successful in the Middle East, Turkey, Singapore and Amsterdam.”

At the moment the retailer has no plans to expand to the U.S., executives say.

Bradbury says there is potential for further growth in the U.K. “We’re still opening and enlarging stores in the U.K.,” he said.

David Dalziel, creative director of U.K. store design consulting firm Dalziel & Pow, has been working with River island for 20 years. Dalziel says he has watched the retailer progress from a “100-store, fashion-following retailer to a fashion-forward brand.”

“The development has not happened overnight or at an even pace, but in key steps along the way,” Dalziel said. “The latest step change came with the building of their flagship on Oxford Street, London in 2005.” The Oxford Street store gave the chain some needed prestige against the likes of H&M, Mango and Zara. “Each store carries an element of newness, in its finish, its plan approach, its merchandising methods or its lighting — all aspects of the package are in constant review. This gives River Island an edge over its rivals.”

In England, River Island opened an 8,610-square-foot store at the Westfield Shoppingtowns Ltd.-owned Eagle Centre, in Derby’s city center and an 11,420-square-foot unit in Northampton.

River Island has instructed property agency Harper Dennis Hobbs to find larger stores in shopping center and High Street locations. “We continue to seek units of 7,000 square feet to 15,000 square feet,” said David Purslow, a director at Harper Dennis Hobbs. “We’re hopeful that this year will be just as successful, because we are in negotiations on a lot of re-sites to bigger premises and are considering a number of new towns.”

Last year Harper Dennis Hobbs obtained eight mall slots for River Island, including ones in Bluewater, outside London; Fargate and Meadowhall, in Sheffield; New Shires, in Leicester; Southside, in Wandsworth; and Touchwood, in Solihull.

Harper Dennis Hobbs advises River Island in the Midlands and central southern regions; Keenan & Co. acts in the north and in north Wales; Churston Heard acts for the retailer in south Wales, the southwest and eastern home counties; and Cushman & Wakefield represents the retailer in Scotland.

“The latest stores are larger and more prestigious, building on the confidence of the business overall,” said Dalziel. “They do not have a store that is big enough to house their wide range of offer. We can expect bigger stores in the coming years, with more architectural treatments, such as double height atriums, banks of escalators and mezzanine floors.”