The Works looks to achieve stable growth after year of 'considerable change'

Sales at The Works grew marginally in the year to 5th May 2024, with the business focused on “stabilising profitability by improving margins and reducing costs” and ending its loyalty scheme, and the group’s public listing transferred to the Alternative Investment Market (AIM) during the period.

The group returned total revenue growth of 0.9% to £282.6m with a like-for-like sales decline of 0.9%. It said it expected to report adjusted earnings of about £6m, rising to £8.5m in the next fiscal year. Its full-year financial results also reported that it had improved the quality and profitability of its store portfolio, with nine new store openings, 24 closures, five relocations and 21 store refits. Its store estate represented about 90% of sales, it said.

The retailer highlighted the ending of its loyalty scheme to focus instead on maintaining affordable prices, and improved product margins through negotiations with suppliers and optimised promotional activity.

Gavin Peck, chief executive of The Works, described it as a year of "considerable change", adding: "We are pleased to have finished Fiscal Year 2024 in line with market expectations, which reflects action taken to reset our cost base and improve margins, supported by improving store sales in the final quarter. Significant changes implemented across the business make us well-placed to offset cost headwinds and we expect to return to profit growth in Fiscal Year 2025.”

The business added that it expected to deliver stable sales this year. “We are confident that the action taken to reduce costs and improve margins will offset the significant cost headwinds we face, including National Living Wage, higher freight costs, and business rates.”

The chain’s half-year results released in January reported revenue growth of 3.1% with total like-for-like sales up 1.6% “against a challenging backdrop and softened consumer demand”.