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River Island calls in advisers to tighten grip on costs ahead of tax rises

River Island calls in advisers to tighten grip on costs ahead of tax rises

River Island has reportedly drafted in consultants from AlixPartners to assist in managing costs and improving profitability as the high street faces the looming prospect of tax hikes in April.

The privately owned fashion retailer operates over 250 stores across the UK. While the scope of the advisory work AlixPartners will take is not fully clear, it is understood that it does not involve formal restructuring or store closures, Sky News reported.

River Island, owned by the Lewis family, has experienced significant challenges in recent months, with rising costs and competitive pressures.

In October, the retailer posted a pre-tax loss of £32.2m for the year ending December 30, driven by a 15% decline in sales and ongoing investments in the rollout of its new concept stores.

Retailers across the sector have raised concerns about the impact of forthcoming national insurance hikes, which are expected to affect the entire industry with a multibillion-pound cost.

Last week Next CEO Lord Wolfson warned the upcoming tax changes in April will make it harder for individuals to “enter the workforce”.

Speaking to the BBC, Wolfson warned that the higher NI contributions required from employers will have a significant impact on the retail sector. He added that “the axe [had] fallen particularly hard” on entry-level positions.

Meanwhile, at the start of the month, fellow fashion retailer New Look revealed it would be ramping its store closure programme ahead of the looming tax increases.

River Island directors said that while the trading environment during the subsequent year had been “challenging”, they remained “positive” about the outlook.

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