Furthermore, there is a high threat of potential entrants into the market. Lately we are seeing the development of many online only fashion retailers, this is because there are cheap start-up costs and new brands can build themselves a platform to establish easily through social media channels, mainly Instagram which they can not only reach a wide audience but their specific target market as well. This affects River Island as online only stores with an already established brand are now entering the high street. E.g., Missguided who opened their first store in London in November 2016 could open more stores and compete with leading high street retailers if they are successful online it could bring consumers to their high street stores also. (Retail Gazette, 2016)

Another external factor that is likely to affect River Island is the uncertainty of what Brexit will mean for retailers. Following the vote, the pound fell to a seven-year low. This will have a negative impact on the fashion industry, as production will be more expensive. River Island do produce some of their clothing outside the UK and will therefore experience a rise in manufacturing costs. Furthermore there is no guarantee Britain will still have access to the free market, meaning there is a possibility exporting and importing will become difficult. This means uncertainty over new trade agreements the government will be able to make, and the impact this will have on the export and import of fashion goods. Overall Brexit will affect the economy, which will affect the consumer, which will eventually affect the retailer, and back to the economy. River Island could soon become more expensive as they may have to increase their prices to cover their costs. (Thenationalstudent.com, 2016).

River Island have however increased the number of items that they manufacture in the UK by 50 per cent, and that has reportedly improved efficiencies within the business. (Retailgazette.co.uk, 2015) This is because it is more economical to produce goods and this gives the opportunity to react to changing trends and get them to consumers quicker, furthermore close to nine in 10 shoppers would be interested in buying clothes made in Britain but British goods tend to be very expensive which puts most people off buying. (Mintel, 2016). Customers could be therefore be put off buying in River Island due to them having more expensive prices than other street retailers already and their prices may keep rising due to the uncertainty of the British economy.

Additionally River Island do target the 18-25 year old demographic, these are the consumers who are using social media a lot and are aware of the ever changing trends in fashion, this means River Island need to reac